[Code of Ethics] [Financial Management Code of Ethics] [Code of Conduct] [Audit Committee Charter]
[Nominating and Governance Committee Policy] [Nominating and Governance Committee Charter] [Compensation Committee Charter]
ProUroCare Medical Inc. has a policy of requiring adherence to the highest ethical standards in all its dealings with customers, vendors, employees and stockholders. Ethical behavior contemplates the principles of morality, fairness and respect.
Ethical lapses are not a shortcut to profitability. Unimpeachable ethical conduct is absolutely consistent with financial success and business excellence.
Compliance with law or strict adherence to a contract is not equivalent to fair dealing. The desirable business practice is to have all contractual terms favor the company but deal in a manner that commands respect within the business community.
Every employee of the company has the right to expect that compensation and advancement opportunities will be determined solely by his/her capability, personal performance and contribution.
Firm and aggressive negotiation on behalf of the company is consistent with this policy.
Dealings with relatives or friends, whether customers, vendors or employees, have the appearance of being a conflict of interest, and such dealings are generally to be avoided. Where such a situation is considered to be in the company’s interest, the review and active participation of the related party’s supervisor is required.
Nowhere is adherence to ethical standards more important than in dealing with vendors and service providers to the company. The enrichment of an employee by a vendor to the company is an absolute ethical lapse. Such a lapse could result in immediate termination without notice. There is no way to successfully assert that an employee’s business judgment has not been affected by such transactions.
Since the conduct of an organization reflects that of its leadership, the obligation to comply with this policy weighs most heavily on the company’s management.
The ethical test of an action is how it will be judged when all of the relevant facts are fully disclosed to all interested parties.
Even the appearance of a conflict of interest is to be avoided.
In addition to the other provisions of this Code, this Financial Management Code of Ethics applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions for the Company, and persons performing similar functions at each subsidiary of the Company (collectively, the “Financial Management”).
The Financial Management of the Company has special responsibilities to ensure the fair and timely reporting of the Company’s financial results and condition, to foster an organizational culture of integrity and honest and ethical conduct, and to promote compliance with all applicable laws, rules and regulations.
Because of this special role, all members of the Company’s Financial Management must adhere to the following requirements (in addition to the Code and all other policies):
Conduct. Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, is required at all times. Dealings with relatives or friends, whether customers, vendors or employees, has the appearance of being a conflict of interest and such dealings are generally to be avoided. Where such a situation is considered to be in the Company’s interest, the review and active participation of the Audit Committee of the Board of Directors is required. Even the appearance of a conflict of interest is to be avoided. Demand compliance with this Code by your subordinates.
Disclosure. Company management with responsibility for communications with regulators and/or the public are required to ascertain that each communication contains full, fair, accurate, timely and understandable disclosures. The goal of each member of the Financial Management is to contribute to the quality of the Company’s financial statements and related public disclosures. Endeavor to identify and correct any false or misleading information.
Compliance. Understanding of and compliance with all applicable laws, rules and regulations is required at all times.
Reporting. If a member of the Financial Management becomes aware of behavior of a violation or potential violation of this Code, it must be promptly reported to the Audit Committee of the Board of Directors by use of the mechanism set forth in “Confidential Reporting of Violations and Concerns” above, or other reasonable means which include confirmation of receipt.
Accountability. Failure to adhere to this Code, or any portion hereof, will be viewed as a severe disciplinary matter that may result in disciplinary action, including immediate termination of employment without notice. Participation in any periodic review process conducted by the Company to review and access compliance with this Code, and to facilitate improvements, is required.
Note : Nothing in this Code confers upon any employee any right to continue in the employ of or engagement by the Company or constitute any contract or agreement of employment or engagement. The nature of the employee’s relationship, subject to any employment contract that he or she may have with the Company, is and remains “at-will,” subject to the terms of any agreement that such employee may have with the Company.
ProUroCare Medical, Inc. and its subsidiaries (collectively, the “Company”) has a policy of requiring adherence to the highest ethical standards in all its dealings with customers, vendors, employees and stockholders. Ethical behavior contemplates the principals of morality, fairness and respect.
Coverage In addition to strict adherence to the Ethics Policy and all other applicable policies, this Code of Conduct (this “Code”) applies to all employees, officers and directors of the Company; provided that, Article III below applies solely to financial management of the Company as identified therein.
This Code is intended to comply with all applicable rules and regulations, including without limitation Nasdaq’s “code of conduct” provisions and those promulgated by the Securities and Exchange Commission under Section 406 of the Sarbanes-Oxley Act of 2002.
Conflicts of Interest The Company expects everyone to avoid conducting personal or private business that conflicts with, or gives the appearance of conflicting with, the interests of the Company. You are also required to notify the Company in the event you encounter actual or potential conflicts in the future.
Fair Dealing We do not seek competitive advantages through illegal or unethical business practices. Each employee, officer and director should endeavor to deal fairly with the Company’s service providers, suppliers, competitors and employees. No employee, officer or director should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any unfair dealing practice.
Compliance with the Law You are required to obey all governmental laws, rules and regulations applicable to your conduct of the Company’s business. In this regard, it is your responsibility to become familiar with the rules, regulations and laws that may apply to your business dealings. Merely complying with the law, however, should not comprise the limits of your ethical behavior. Rather, this requirement is the minimum, essential part of your ethical responsibility.
Ethical Obligations Regarding SEC Reports and Other Public Communications As a public company, it is of critical importance that the Company’s filings with the Securities and Exchange Commission and other public communications be accurate and timely. Depending upon your position with the Company, you may be called upon to provide information to assure that the Company’s public reports are accurate, complete, fair and understandable. The Company expects all of its personnel to take this responsibility very seriously and to provide prompt and accurate information related to the Company’s public disclosure requirements.
All of our employees and directors must strive to adhere to these principles and to cultivate a culture throughout the Company that promotes the fair and timely reporting of the financial results and condition of the Company.
Code Administration This Code shall be administered by the Audit Committee of the Board of Directors. The Audit Committee, with the assistance of the management of the Company, is ultimately responsible for distributing and periodically updating this Code, providing education to employees about their ethical responsibilities, ensuring that procedures are in place for reporting violations, monitoring and investigating suspected violations and enforcing this Code.
Addressing Concerns or Questions Every person subject to this Code must comply with the letter and spirit of this Code and with the policies and procedures of the Company. No matter how insignificant an issue may seem, you should challenge questionable behavior as soon as you see or suspect it is happening. As part of the Company’s open door policy, we want you to take questions that concern business conduct and ethics to your supervisor, a senior leader or to the Chairman of the Audit Committee. The overriding idea is to speak up and bring concerns into the open so that any problems can be resolved quickly and serious harm may be avoided. Be assured that any person who reports a suspected violation in good faith will not be subject to retaliation.
Confidential Reporting of Violations and Concerns The Audit Committee of the Board of Directors, on behalf of the Company, has established a procedure by which concerns, complaints or suspected violations may be raised confidentially. This procedure may be used to confidentially raise concerns about the Company’s accounting, internal accounting controls or auditing matters. An employee may utilize this confidential procedure to raise a new complaint or concern or to report a complaint or concern that he or she has previously raised which he or she feels has not been appropriately handled.
To confidentially submit a concern, complaint or suspected violation, including a concern about the Company’s accounting, internal accounting controls or auditing matters, you may anonymously contact any member of the Audit Committee of the Board of Directors at the telephone numbers and addresses provided below. Complaints regarding the Company’s accounting, internal accounting controls or auditing matters will be promptly presented to and addressed by the Audit Committee of the Board of Directors. Other complaints will be investigated by appropriate Company personnel, including, when appropriate, the Audit Committee of the Board of Directors. Be assured that an employee who reports a suspected violation in good faith will not be subject to retaliation and his or her confidentiality will be protected in accordance with applicable law.
If any person believes that he or she has been subjected to any retaliation, he or she may file a complaint with the Chairman of the Audit Committee. If it is determined that an employee has experienced any improper employment action, such employee will be entitled to appropriate corrective action.
Effect of Violations The Company will promptly take appropriate action if you engage in conduct that is considered unacceptable. Disciplinary action will be taken against:
- Any person who authorizes, directs, approves or participates in violations of this Code or the Ethics Policy or other applicable policies;
- Any person who has deliberately failed to report violations of this Code or the Ethics Policy or other applicable policies, who has concealed violations of this Code or the Ethics Policy or other applicable policies or who has deliberately withheld or misstated relevant information concerning a violation of this Code or the Ethics Policy or other applicable policies;
- Any person who retaliates, directly or indirectly, or encourages other to do so, against any other person because of a report by that person of a suspected violation of this Code or the Ethics Policy or other applicable policies; and
- Any person who, under the circumstances, should have known about a violation by another person under his or her supervision or who did not act promptly to report and attempt to correct a violation.
Disciplinary measures that may be invoked include, but are not limited to, counseling, oral or written reprimands, warnings, probation, suspension without pay, demotions, reductions in salary, termination of employment and/or restitution. Furthermore, illegal actions will be dealt with swiftly and violators will be reported to appropriate authorities. The specific sequence of steps to be followed will be determined jointly by your supervisor and the Audit Committee Chairman. In addition, some circumstances may require the involvement of other members of the senior management team and/or the Audit Committee of the Board of Directors. Although no two situations are identical, the Company is committed to prompt, fair and consistent enforcement of this Code.
Waivers There shall be no material change in any part of this Code except by a vote of the Board of Directors of the Company. Any waiver of this Code for directors or executive officers (including our principal financial and accounting officer(s)) must be approved by the Board of Directors and will be promptly disclosed, together with the reasons for granting the waiver, by the Company to its stockholders in the manner required by law.
The primary function of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of ProUroCare Medical Inc. (the “Corporation”) is to assist the Board in fulfilling its oversight responsibilities by reviewing: the financial reports and other financial information provided by the Corporation to any governmental body or the public; the Corporation’s systems of internal controls regarding finance, accounting, legal compliance and ethics that management and the Board have established; and the Corporation’s auditing, accounting and financial reporting processes generally. Consistent with these functions, the Committee should encourage continuous improvement of, and should foster adherence to, the Corporation’s policies, procedures and practices at all levels. The Committee’s primary duties and responsibilities are to:
serve as an independent and objective party to oversee the Corporation’s financial reporting process and internal-control systems;
review and appraise the audit of the Corporation’s financial statements performed by the Corporation’s independent accountants, who shall report directly to the Committee; and
provide an open avenue of communication among the Corporation’s independent accountants, financial and senior management, and the Board.
The Committee shall be composed of at least two directors as determined by the Board; provided, however, that if the Corporation’s securities are listed on the Nasdaq Stock Market, as defined in Nasdaq Marketplace Rule 4200, then the Committee shall be composed of at least three directors as determined by the Board. Each member of the Committee shall be free from any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Committee. Furthermore, if the Corporation’s securities are listed on the Nasdaq Stock Market, each Committee member shall: (i) be an “independent” director as defined by Nasdaq Marketplace Rule 4200 (subject to any then-current exceptions to such requirement; e.g., Nasdaq Marketplace Rule 4350(d)(2)(B)); (ii) meet the criteria for independence set forth in Rule 10A-3(b)(1) promulgated under the Securities Exchange Act of 1934, as amended; (iii) not have participated in the preparation of the Corporation’s financial statements (or any current subsidiary of the Corporation) at any time during the past three years; and (iv) have a working familiarity with basic finance and accounting practices, including the ability to read and understand financial statements. Committee members may enhance their familiarity with finance and accounting by participating in educational programs conducted by the Corporation or an outside consultant.
The Committee shall endeavor to have, as one of its members, an individual with past employment experience in finance or accounting, or any other comparable experience or background resulting in such member’s financial sophistication (including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities). In addition, the Committee shall endeavor to have, as one of its members, an individual qualifying as an “audit committee financial expert” in compliance with the criteria established by the United States Securities and Exchange Commission (the “Commission”) and other relevant regulations. The existence of such audit committee financial expert, including his or her name and whether or not he or she is independent, or the lack of an audit committee financial expert, shall be disclosed in the Corporation’s periodic filings as required by Section 13(a) of the Securities Exchange Act of 1934, as amended, and the regulations thereunder.
The members of the Committee shall be elected by the Board at the annual organizational meeting of the Board and shall serve until the next annual organizational meeting of the Board or until their successors have been duly elected and qualified. Unless a chairperson is elected by the Board, the members of the Committee may designate a Committee chairperson by majority vote of the full Committee membership.
The Committee shall meet at least two times annually, or more frequently as circumstances require. As part of its job to foster open communication, the Committee should meet at least annually with management and the independent accountants in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately.
Responsibilities and Duties
To fulfill its responsibilities and duties, the Committee is expected to:
- provide an open avenue of communication between the Corporation, the independent accountants, and the Board;
- review the Committee’s charter at least annually and recommend to the Board any necessary or desirable amendments;
- maintain sole authority and responsibility for hiring and firing the independent accountants, and maintain direct responsibility for the appointment, compensation, retention and oversight of the independent accountants’ work, including the resolution of disagreements between management and the auditor regarding financial reporting, for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Corporation;
- assess the effectiveness of the Corporation’s internal control environment, and evaluate the need for an internal audit function; and discuss with management any significant deficiencies in internal controls that have been identifies by the Chief Executive Officer or Chief Financial Officer which could adversely affect the Corporation’s ability to record, process, summarize or report financial data;
- confirm and ensure the independence of the internal audit function and the independent accountants, including considering whether the independent accountant’s performance of permissible non-audit services and the compensation received for such services is compatible with the independent accountant’s independence (in this regard, the Committee shall be responsible for ensuring its receipt from the independent accountant of a formal written statement, consistent with “Standards Board Standard 1,” delineating all relationships between such independent accountant and the Corporation);
- review and preapprove the performance of all audit and non-audit accounting services to be performed by the independent accountant, other than with respect to de minimis exceptions permitted by the Sarbanes-Oxley Act of 2002, to the extent such services are permitted under applicable rules and regulation;
- inquire of management and the independent accountants about significant risks or exposures, and assess the steps management has taken to minimize such risk to the Corporation;
- in consultation with the independent accountant, consider the audit scope and plan of the independent accountant;
- consider and review with the independent accountant: (a) the adequacy of the Corporation’s internal controls, including computerized information system controls and security; and (b) any related significant findings and recommendations of the independent accountant together with management’s responses thereto;
- review the following items with management and the independent accountant at the completion of the annual examination, and recommend to the Board whether the financial statements should be included in the annual report on Form 10-K (or Form 10-KSB):
- he Corporation’s annual financial statements and related footnotes;
- the independent accountant’s audit of the financial statements and his or her report thereof;
- any significant changes required in the independent accountant’s audit plan;
- any serious difficulties or disputes with management encountered during the course of the audit; and
- other matters related to the conduct of the audit which are to be communicated to the Committee under SAS numbers 61 and 90;
- review with management, and if appropriate, with the independent accountants, the interim financial results that are filed with the Commission or other regulators;
oversee and participate in the Corporation’s internal controls compliance activities under Sarbanes-Oxley Section 404 (“SOX 404”), including:
- eeting in a working group each fiscal quarter that includes the Corporation’s Chief Executive Officer and Chief Financial Officer (such working group to be designated as the “Disclosure Committee”) designed to ensure that disclosures made in annual and quarterly reports filed with the Securities and Exchange Commission adequately describe all material events required to be so disclosed;
- establishing a protocol for identifying, reviewing and testing key accounting controls and significant accounts, and performing or supervising such activities independently from Corporation personnel who perform the related accounting activities, and
- engage independent resources to perform and document such tests and reviews as is required to assess and document the Corporation’s compliance with the requirements of SOX 404;
- review with management legal and regulatory matters that may have a material impact on the financial statements, related company compliance policies, and programs and reports received from regulators;
- review the Corporation’s critical accounting policies and estimates, all alternative treatments of financial information within accounting principles generally accepted in the United States of America discussed between the independent accounts and management, and all other material written communications between the independent accounts and management;
- review the internal-controls report prepared by management for insertion into the annual report and the independent accountant’s attestation on the assertions of management that are contained in the internal-controls report;
- ensure there is a process for the confidential, anonymous submission by the Corporation’s employees of concerns regarding questionable accounting and auditing matters;
- ensure procedures are established for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, auditing and internal-accounting controls;
- review and approve (with the concurrence of a majority of the disinterested members of the Board) any related party and affiliated-party transactions; and
- report Committee actions to the Board with such recommendations as the Committee may deem appropriate.
The Committee shall have the power to conduct or authorize investigations into any matters within the Committee’s scope of responsibilities, as outlined above. The Committee has the authority to engage and determine funding for outside legal, accounting or other advisors, and to obtain advice and assistance from such outside advisors as deemed appropriate to perform its duties and responsibilities. The Committee will perform such other functions as assigned by law, the Corporation’s charter or bylaws, or the Board.
By action of the Committee, the authority to grant preapproval may be delegated to one or more designated members of the Committee who are independent members of the Board, with any such preapproval to be reported to the Committee at its next regularly scheduled meeting. Approval of non-audit services shall be disclosed in the Corporation’s periodic reports required by Section 13(a) of the Securities Exchange Act of 1934, as amended.
There shall be a committee of the Board of Directors (the “Board”) of ProUroCare Medical Inc. (the “Company”) called the Nominating and Governance Committee (the “Committee”).
B. Purpose of Committee
The purpose of the Committee is to provide oversight in relation to the corporate governance of the Company, including: (i) identifying individuals qualified to become Board members; (ii) recommending to the Board director nominees; (iii) recommending to the Board a set of corporate governance principles applicable to the Company; (iv) providing oversight in respect of other relevant matters relating to the composition and operation of the Board; and (v) performing such other duties as assigned to it from time to time by the Board.
C. Committee Membership
The Committee members shall be appointed by the Board, and shall serve at the pleasure of the Board and for such term or terms as the Board may determine. The Committee shall be composed of at least two directors, except as otherwise necessary to comply with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the Securities and Exchange Commission (the “SEC”) and the Nasdaq Small Cap Market. A majority of the Committee members shall meet the independence requirements of the SEC and Nasdaq. The Board shall make determinations as to whether a particular director satisfies the requirements for membership on the Committee.
D. Committee Structure and Operations
The Board shall designate one member of the Committee as its chairperson (the “Chair”). The Committee shall meet at least three times a year, with further meetings to occur when deemed necessary or desirable by the Committee or its Chair. The Committee may meet in person or by telephone or videoconference and may take action by written consent. The Committee may invite such members of management to its meetings as it may deem desirable or appropriate, consistent with the maintenance of the confidentiality of the issues under discussion.
E. Committee Duties and Responsibilities
The Committee shall:
- Recommend to the Board a Board size and composition that the Committee determines is best suited to fulfilling the Board’s responsibilities.
- Identify individuals believed to be qualified to become Board members in accordance with the Nominating Criteria set forth below, and recommend to the Board the nominees to stand for election as directors at the annual meeting of stockholders or, if applicable, at a special meeting of stockholders. In the case of a vacancy in the office of a director (including a vacancy created by an increase in the size of the Board), the Committee shall recommend to the Board an individual to fill such vacancy either through appointment by the Board or through election by stockholders.
- In the case of a director nominee to fill a Board vacancy created by an increase in the size of the Board, make a recommendation to the Board as to the class of directors in which the individual should serve, consistent with the Company’s charter and bylaws.
- Recommend to the Board all committee assignments including members and chairs.
- Review and recommend to the Board the Charters of all Board committees with a view to comprehensive and effective committee operations and to prevent conflicts among committees.
- In coordination with the Chief Executive Officer, prepare and recommend to the Board a schedule of Board meetings that is sufficiently frequent and timely to enable the Board to fulfill its responsibilities.
- In coordination with the Chief Executive Officer, recommend to the Board a compensation and benefits package that will attract and retain qualified directors. In discharging this duty, the Committee shall be guided by three goals: (i) compensation should fairly pay directors for work required for a company of the size and scope of the Company; (ii) compensation should align directors’ interests with the long-term interests of stockholders; and (iii) the structure of compensation should be simple, transparent and easy for the stockholders to understand.
- In coordination with the Chief Executive Officer, recommend to the Board the slate of corporate officers to be elected annually by the Board.
- Provide oversight of the succession plan for the Chief Executive Officer and recommend to the Board a successor to the Chief Executive Officer when a vacancy occurs.
- In coordination with the Chief Executive Officer, annually review the succession plan for senior management of the Company and other key talent and organizational issues (including major organizational changes, work force demographics and key organizational capability issues) and report on the plan to the Board at the Board’s next regular meeting to allow Board members the opportunity to review and discuss the plan.
- Evaluate stockholder proposals received by the Company. Stockholder nominees for director shall be reviewed and evaluated in accordance with the Nominating Criteria set forth below. Based on these evaluations, the Committee shall make appropriate recommendations to the Board.
- Develop and recommend to the Board standards to be applied in making determinations on the types of relationships that constitute material relationships between the Company and a director for purposes of determining director independence.
- Develop and recommend to the Board a set of corporate governance guidelines applicable to the Company, taking into account the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”), and any other sources that the Committee deems appropriate. The Committee will provide ongoing oversight of governance, with the objective of compliance with corporate governance standards, policies and practices.
- Review the Company’s corporate governance guidelines at least once per year, and prepare a report to the Board recommending any proposed changes.
- Review and recommend to the Board with regard to certificate of incorporation, bylaws or stockholder rights plan issues or changes in fundamental corporate charter provisions.
- Review and recommend to the Board with regard to director orientation, training and continuing education.
- Exercise oversight of the conduct of the annual performance evaluation of the Board and management.
- Review the disclosures on nominating committee functions and communications between security holders and boards of directors required to be included in the Company’s proxy statement.
- Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
- Conduct an annual performance evaluation of the Committee.
- Perform such other duties and responsibilities, consistent with this Charter and governing laws, as may be delegated to the Committee from time to time by the Board.
- Report to the Board on a regular basis with respect to the activities of the Committee; apprise the Board, through minutes, special presentations or otherwise as necessary, of any significant developments relating to the responsibilities of the Committee; and make such recommendations with respect to any of the above matters as the Committee deems necessary or appropriate.
F. Nominating Criteria
The Committee will identify and evaluate candidates for nomination to the Board pursuant to its “Policy Regarding Identification and Evaluation of Potential Director Nominees.” In evaluating candidates, the Committee shall take into account the applicable requirements for directors under the Exchange Act and the listing standards of Nasdaq. The Committee may take into consideration such other factors and criteria as it deems appropriate in evaluating a candidate.
G. Delegation to Subcommittee
The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.
H. Resources and Authority of the Committee
The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to retain counsel and other experts or consultants. The Committee shall have the sole authority to select and retain a consultant or search firm, to terminate any consultant or search firm retained by it, and to approve the consultant or search firm’s fees and other retention terms.
The Board shall have the authority to amend or modify any provision of this Charter at any time; provided, however, that the Board may make no such amendment or modification that is inconsistent with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC and the Nasdaq.
1. Identification and Evaluation of Director Nominees
The Nominating and Governance Committee (“Committee”) is responsible for identifying, evaluating and recommending qualified candidates for election to the Board of Directors in accordance with the Company’s Nominating Governance Committee Charter. The Committee may consider candidates submitted by a variety of sources (including, without limitation, incumbent and past directors, stockholders, the Company’s management and, if retained, third party search firms) when reviewing candidates to fill vacancies and/or expand the Board.
If a vacancy arises or the Board decides to expand its membership, the Committee may seek recommendations of Director candidates from a variety of sources. At that time, the Committee also will consider Director candidates submitted by stockholders in accordance with the procedures described below. The Committee will then evaluate each Director candidate’s educational background, employment history, outside commitments and other relevant factors to determine whether he/she is potentially qualified to serve on the Board. The Committee will seek to identify and recruit the best available candidates, and it will evaluate qualified stockholder candidates on the same basis as those submitted by other sources. If the process yields one or more desirable candidates, the Committee will rank them by order of preference, depending on their respective qualifications and the Company’s needs. The Chairman of the Committee, or another Director designated by the Chairman of the Committee, will contact the desired candidate(s) to evaluate and/or confirm their interest. Interviews of candidates may be held by the Committee. Based upon interview results, the candidate’s qualifications and appropriate background checks, the Committee will then decide whether it will recommend the candidate’s nomination to the full Board.
2 Nomination of Candidates for Director Received From Stockholders
The Committee will consider Director candidates submitted by stockholders. Any stockholder wishing to submit a candidate for consideration (the “Recommending Stockholder”) should send the following information to the Nominating and Governance Committee, ProUroCare Medical Inc., 5500 Wayzata Blvd., Suite 310, Golden Valley, MN 55416:
- (i) The Recommending Stockholder’s name and address as it appears on the Company’s books; the number and class of shares owned beneficially and of record by such Recommending Stockholder and the length of period held; and proof of ownership of such shares;
- (ii) Name, age and address of the candidate;
- (iii) A detailed resume describing, among other things, the candidate’s educational background, occupation, employment history, and material outside commitments (e.g., memberships on other boards and committees, charitable foundations, etc.);
- (iv) Any information relating to such candidate that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and rules promulgated thereunder;
- (v) A description of any arrangements or understandings between the Recommending Stockholder and such candidate;
- (vi) A supporting statement which describes the candidate’s reasons for seeking election to the Board of Directors, and documents his/her ability to satisfy the Director qualifications described in Section 3, below; and
- (vii) A signed statement from the candidate, confirming his/her willingness to serve on the Board of Directors.
In addition, if the Recommending Stockholder has individually been the beneficial owner of more than 5% of the Company’s common stock for a period of at least one year, or is part of a group of Recommending Stockholders who together beneficially own more than 5% of the Company’s common stock (for purposes of this calculation, each of the securities used to calculate the ownership percentage must have been beneficially owned by such person for at least one year) and such person or group submits a candidate within 120 calendar days before the anniversary date of the release of the Company’s previous proxy statement to stockholders, then
- (i) each such Recommending Stockholder must provide written consent to the Company’s public identification of each such Recommending Stockholder by name in connection with the Recommending Stockholder(s) nomination, and
- (ii) the candidate for Director named by such Recommending Stockholder(s) must consent in writing to the Company’s public identification of such candidate and the Company’s disclosure of whether or not it chose to nominate such candidate.
The Chairman of the Committee will promptly forward such materials to the Chairman of the Board and will also maintain copies of such materials for future reference by the Committee when filling Board positions.
Except as provided herein, stockholders may submit Director candidates at any time pursuant to these procedures. The Committee will consider such candidates if a vacancy arises or if the Board decides to expand its membership, and at such other times as the Committee deems necessary or appropriate.
Separate procedures apply if a stockholder wishes to submit at the Company’s Annual Meeting a Director candidate that is not approved by the Committee or Board. Those procedures are described in the Company’s bylaws.
3. Director Qualification Standards
The Committee works with the Board on an annual basis to determine the appropriate characteristics, skills, and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, government, education, and public service. Characteristics expected of all directors include independence, integrity, high personal and professional ethics, sound business judgment, and the ability and willingness to commit sufficient time to the Board. In evaluating the suitability of individual Board members, the Board takes into account many factors, including general understanding of marketing, finance, and other disciplines relevant to the success of a small publicly traded medical device company in today’s business environment; understanding of the Company’s business and technology; educational and professional background; personal accomplishment; and geographic, gender, age, and ethnic diversity. The Board evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of the Company’s business and represent shareholder interests through the exercise of sound judgment, using its diversity of experience. In determining whether to recommend a director for re-election, the Committee also considers the director’s past attendance at meetings, participation in and contributions to the activities of the Board, and the results of the most recent Board self-evaluation.
4. Nominating and Governance Committee Charter
The Committee will, at all times, act in accordance with the standards set forth in the Nominating and Governance Committee Charter.
5. Amendment, Modification and Waiver
These Policies may be amended, modified or waived by the Board of Directors or by the Committee, subject to the disclosure and other provisions of the Exchange Act, the rules promulgated thereunder and the applicable rules of Nasdaq.
There shall be a committee of the Board of Directors (the “Board”) of ProUroCare Medical, Inc., (the “Company”) called the Compensation Committee (the “Committee”).
B. Purpose of Committee
The purpose of the Committee is to: (i) oversee the administration of the Company’s compensation programs; (ii) review and approve the compensation of executive officers; (iii) prepare an annual report on executive compensation for inclusion in the Company’s proxy statement as required by the rules and regulations of the Securities and Exchange Commission (“ SEC”); and (iv) perform such other duties as assigned to it from time to time by the Board.
C. Committee Membership
The Committee members shall be appointed by the Board, on the recommendation of the Corporate Governance and Nominating Committee, and shall serve at the pleasure of the Board and for such term as the Board may determine. The Committee shall be composed of two or more directors. The Chair of the Committee and, if required by Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), or Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), each other member of the Committee, shall (i) meet the independence requirements of Nasdaq; (ii) meet the requirements for a “Non-Employee Director” contained in Rule 16b-3 under the Exchange Act; and (iii) meet the requirements for an “outside director” for purposes of Section 162(m) of the Code. The Board shall make determinations as to whether a particular director satisfies the requirements for membership on the Committee.
D. Committee Structure and Operations
The Board shall designate one member of the Committee as its chairperson (the “Chair”). The Committee shall meet at least four (4) times a year, with further meetings to occur when deemed necessary or desirable by the Committee or its Chair. The Committee may meet in person or by telephone or videoconference and may take action by written consent.
The Committee may invite such members of management and legal counsel to its meetings as it may deem desirable or appropriate, consistent with the maintenance of the confidentiality of compensation and other discussions. The Company’s Chief Executive Officer or President (collectively the “CEO”) shall not attend that portion of a meeting where his or her performance or compensation are discussed, unless specifically invited by the Committee.
E. Committee Duties and Responsibilities
The Committee shall:
- Annually review and approve corporate goals and objectives relevant to the CEO’s compensation, evaluate the CEO’s performance in light of those goals and objectives and determine and approve the CEO’s compensation based on this evaluation. In determining the long-term incentive component of the CEO’s compensation, the Committee shall consider, among other factors, the Company’s performance and relative stockholder return, the value of similar incentive awards to chief executive officers at comparable companies, the awards given to the CEO in past years and any other relevant factors.
- The Chair of the Committee, in consultation with the other independent members of the Board, (i) consult with the CEO about his or her annual and long-term objectives; (ii) consult with the CEO in preparation for an annual appraisal of his or her job performance; (iii) consult with the CEO in preparation for any interim performance appraisal requested by him or her or by the Board; and (iv) communicate with the CEO concerning the Board’s appraisal of his or her performance. (Alternately, the entire Board may wish to discuss performance with the CEO.)
- Periodically recommend the amount and nature of compensation to be paid by the Company to each of its non-CEO executive officers as well as key employees designated by the Board. The Committee’s recommendations shall cover not only salaries but all direct and indirect compensation, including incentive compensation, deferred Compensation, profit sharing, retirement benefits, perquisites, group insurance, and all benefits of a similar nature.
- Administer all stock option plans, executive incentive and deferred compensation plans, and other executive benefit plans of the Company as provided for in such plans. Provide oversight of pension, retirement and other employee benefit plans. Consider periodically the adequacy and reasonableness of all such plans and the desirability and Approval of any amendments to the provisions of such plans, as well as the costs thereof to the Company.
- Periodically review the adequacy and reasonableness of the salary structure, salary grades and grade ranges applicable to various levels of management within the Company. The Committee also shall review and approve salary changes for the CEO’s direct reports and business unit heads.
- Review and approve incentive compensation awards for participants in incentive plans to the extent that such awards are authorized by the plans. The Committee also shall make recommendations to the Board for approval of awards where Board approval is required under the plans or Board resolutions.
- Review periodically the strategy, philosophy and effectiveness of the mix of fixed and variable compensation, perquisites and similar benefits available to executive officers and other senior managers and the Company’s policies and procedures with respect thereto.
- Consider periodically the competitiveness of the Company’s executive compensation and other compensation programs with respect to relevant industries and the business community generally.
- In consultation with senior management, oversee regulatory compliance with respect to compensation matters, including overseeing the Company’s policies on structuring compensation programs to preserve tax deductibility, and, as and when required, establishing performance goals and certifying that performance goals have been attained for purposes of Section 162(m) of the Code.
- Review and approve, for the CEO and the other executive officers and senior managers of the Company, when and if appropriate, employment agreements, severance agreements and change in control provisions/agreements and any severance or similar termination payments proposed to be made to any current or former executive officer of the Company.
- Prepare the annual report on executive compensation required to be included in the Company’s annual proxy statement.
- Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
- Conduct an annual performance evaluation of the Committee.
- Perform such other duties or responsibilities, consistent with this Charter and governing laws, as may be delegated to the Committee from time to time by the Board.
- Report to the Board on a regular basis with respect to the activities of the Committee; apprise the Board, through Minutes, special presentations or otherwise as necessary, of any significant developments relating to the responsibilities of the Committee; and make such recommendations with respect to any of the above matters as the Committee deems necessary or appropriate.
F. Delegation to Subcommittee
The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.
G. Resources and Authority of the Committee
The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to retain counsel and other experts or consultants. The Committee shall have the sole authority to select, retain and terminate a compensation consultant and to approve the consultant’s fees and other retention terms.
The Board shall have the authority to amend or modify any provision of this Charter at any time; provided, however, that the Board may make no such amendment or modification that is inconsistent with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC and the Nasdaq Market Exchange.