The purpose of the Nominating/Corporate Governance Committee (the "Committee") of the Board of Directors (the "Board") of Medifast, Inc. (the "Company") is to identify individuals qualified to become Board members; to recommend to the Board individuals to serve as directors of the Company and on committees of the Board; to advise the Board with respect to Board composition, procedures and committees; to develop, recommend to the Board and annually review a set of corporate governance principles applicable to the Company; to evaluate and make recommendations to the Board with respect to the compensation of Directors; to oversee the evaluation of the Board; and to have such other powers and perform such other duties as the Board may from time to time delegate.
Duties and Responsibilities
A. Board Candidates and Nominees
The Committee shall have the following duties and responsibilities with respect to Board candidates and nominees:
a. To develop and recommend to the Board director qualification criteria and establish procedures for evaluating the suitability of potential director nominees. Such criteria shall include the possession of such knowledge, experience, skills, expertise and diversity so as to enhance the Board's ability to manage and direct the affairs and business of the Company, including, when applicable, to enhance the ability of committees of the Board to fulfill their duties and/or to satisfy any independence requirements imposed by law, regulation or NYSE listing standards.
b. To actively identify and attract candidates for director and to review potential nominees proposed by management, shareholders or others.
c. To recommend to the Board the director nominees for election by the shareholders or for appointment by the Board, as the case may be, pursuant to the By-Laws of the Company, which recommendations shall be consistent with the Board's criteria for selecting new directors.
d. To review the suitability for continued service as a director of each Board member when his or her term expires and when he or she has a significant change in status, including but not limited to an employment change, and to recommend whether or not the director should be re-nominated.
e. To review and make recommendations to the Board with regard to length of Board service, director compensation and a retirement policy for members of the Board.
f. To review and oversee any orientation programs for newly elected members of the Board and continuing director education programs and to assist the Board in the implementation of such programs.
B. Board Composition and Procedures
The Committee shall have the following duties and responsibilities with respect to the composition and procedures of the Board as a whole:
a. To review annually with the Board the composition of the Board as a whole and to recommend, if necessary, measures to be taken so that the Board reflects the appropriate balance of knowledge, experience, skills, expertise and diversity required for the Board as a whole and contains at least the minimum number of independent directors required by NYSE listing standards.
b. To review periodically the size of the Board and to recommend to the Board any appropriate changes. c. To make recommendations on the frequency, content and structure of Board meetings.
c. To make recommendations concerning any other aspect of the procedures of the Board that the Committee considers warranted, including but not limited to procedures with respect to the waiver by the Board of any Company rule, guideline, procedure or corporate governance principle.
C. Board Committees
The following shall be the duties and responsibilities of the Committee with respect to the committee structure of the Board:
a. To make recommendations to the Board regarding the size and composition of each standing committee of the Board, including the identification of individuals qualified to serve as members of a committee, including the Committee, and to recommend individual directors to fill any vacancy that might occur on a committee, including the Committee.
b. To monitor the functioning of the committees of the Board and to make recommendations for any changes, including the creation and elimination of committees.
c. To review annually committee assignments and the policy with respect to the rotation of members of the committees and/or chairpersons, and to report any recommendations to the Board.
D. Corporate Governance
The following shall be the duties and responsibilities of the Committee with respect to corporate governance:
a. To develop and review periodically, and at least annually, the Corporate Governance Guidelines adopted by the Board to assure that they are appropriate for the Company and comply with the requirements of the NYSE exchange, and to recommend any desirable changes to the Board.
b. To consider any other corporate governance issues that arise from time to time, and to develop appropriate recommendations for the Board.
c. To review significant shareholder relations issues, corporate political contributions and the Company's charitable contributions.
E. Evaluation of the Board
The Committee shall be responsible for overseeing the evaluation of the Board as a whole and its committees. The Committee shall establish procedures to allow it to exercise this oversight function.
F. Investigations and Studies; Outside Advisers
The Committee may conduct or authorize investigations into or studies of matters within the Committee's scope of responsibilities, and may retain, at the Company's expense, such independent counsel or other advisers as it deems necessary. The Committee shall have the sole authority to retain or terminate any firm to be used to identify director candidates and evaluate director compensation, including sole authority to approve a search firm's fees and other retention terms, such fees to be borne by the Company.
G. Performance Evaluation
The Committee shall annually conduct an evaluation of its own performance and, in light of this, consider changes in its membership, charter or procedures. The Committee shall report to the Board the results of its evaluation, including recommended charter, membership and other changes.
Composition and Qualifications
The Committee shall be comprised of three or more directors, the exact number to be determined from time to time by resolution of the Board.
Each member of the Committee shall be "independent" as required by NYSE listing standards and any other legal requirements as shall from time to time be in effect. The Board of Directors shall, in the exercise of business judgment, determine the "independence" of directors for this purpose.
The Chairman of the Committee shall be designated by a majority vote of the entire Board.
Members of the Committee shall be designated annually by a majority vote of the entire Board (after considering any recommendations of the Committee) at the organizational meeting of the Board of Directors held in connection with the annual meeting of shareholders.
Vacancies on the Committee shall be filled by majority vote of the entire Board. By a majority vote of the entire Board, a member of the Committee may be removed.
Structure and Operation
1. Two members of the Committee shall constitute a quorum. When more than two members are present, the act of a majority of the members present at a meeting at which a quorum is present shall be the act of the Committee, and when only two members are present, the unanimous vote of the two members shall constitute the act of the Committee.
2. The Secretary of the Company, or in the absence of the Secretary such person as may be designated by the Chairman of the Committee, shall act as secretary and keep the minutes of all meetings of the Committee.
3. THE COMMITTEE SHALL MEET AS REQUIRED WITH A MINIMUM OF ONE MEETING PER FINANCIAL YEAR OF THE COMPANY AND AT SUCH OTHER TIMES AS THE CHAIRMAN OF THE COMMITTEE SHALL REQUIRE.
4. The Committee may request that any directors, officers or employees of the Company, or other persons whose advice and counsel are sought by the Committee, attend any meeting of the Committee to provide such pertinent information as the Committee requests.
5. The Chairman of the Committee shall report to the Board at each meeting of the Board the deliberations, actions and recommendations of the Committee since the last Board meeting.
Except as expressly provided in this Charter, the By-laws of the Company or the Company's Corporate Governance Guidelines, or as required by law, regulation or NYSE listing standards, the Committee shall establish its own rules of procedure.