EGC Corporate Governance Practices (May 2018)

A Survey and Related Resources PAGE D-4 CORPORATE GOVERNANCE STANDARDS NYSE NASDAQ Director Independence Standar d 27 (Generally, the NYSE and NASDAQ standards for independence are the same, except as noted) The board of directors must make an affirmative determination as to whether or not each director is independent after reviewing each director’s relationship with the company. Among other criteria, the board’s review includes evaluating whether the director has a relationship with the company or is an officer, partner, or stockholder of a company that has a relationship with the company. Under the NYSE standard for director independence, a director is not independent if: The director served as an employee or the immediate family member served as an executive officer for a company that has made or received the greater of $1million or 2% of gross revenues worth of payments to/from the listed company in any of the past three fiscal years. For purposes of the above rules, “Family Member” includes a person's spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone who shares such person's home. References to “company” include any parent or subsidiary in a consolidated group with the company. The board of directors must make an affirmative determination as to whether each director is independent. Among other criteria, the board’s review includes evaluating whether the director has a relationship with the company or is an officer, partner, or stockholder of a company that has a relationship with the company. Under the NASDAQ standard for director independence, a director is not independent if: The director is or has a Family Member who is a controlling shareholder or an executive officer of a company that has made or received the greater of $200,000 or 5% of gross revenues worth of payments to/from the listed company in any of the past three fiscal years. For purposes of the above rules, “Family Member” means a person’s spouse, parents, children, and siblings, whether by blood, marriage, or adoption, or anyone residing in such person’s home (other than domestic employees). Disclosure of Independence Determination The board must disclose the basis for its determination in its annual proxy statement or, if the company does not file an annual proxy statement, in the company’s annual report filed with the SEC. Alternatively, the board may adopt and disclose standards for determining director independence and make a general disclosure that a given individual meets those standards. No disclosure requirement regarding the basis for independence determination; only whether the determination has been made that a director is independent. Independent Compensation Committee Required. Required. Independent Nominating/Corporate Governance Committee Required. Company has the option to have nominating decisions made by a group consisting of a majority of the independent directors. 27 Under the rules of both NYSE and NASDAQ, company listing in connection with its initial public offering has one year to become fully compliant with the independence standards. Each committee must have one independent director at the initial listing, have a majority of independent directors within 90 days of the initial listing, and be fully independent within one year of the initial listing. Additionally, a Company listing in connection with its initial public offering shall have 12 months from the date of listing to comply with the majority independent board requirement.