B. COMPOSITION OF THE BOARD

The Board has the responsibility to organize its functions and conduct its business in the manner it deems most effective and efficient, consistent with its duties of good faith, due care and loyalty. In that regard, the Board has adopted a set of flexible policies to guide its governance practices in the future. These practices, set forth below, will be regularly evaluated by the Board’s Corporate Governance and Nominating Committee in light of changing circumstances in order to continue serving the best interests of the stockholders. Accordingly, the summary of current practices is not a fixed policy or resolution by the Board, but merely a statement of current practices that is subject to continuing assessment and change.

1. Size of the Board
The Board of Directors currently has seven members. The Board, through the Corporate Governance and Nominating Committee, will regularly evaluate the size of the Board. The Company intends that the Board will be comprised of a majority of non-employee directors in compliance with applicable Nasdaq and ArcaEx listing standards.

2. Board Member Criteria
The Corporate Governance and Nominating Committee is responsible for reviewing the appropriate skills and characteristics required of directors in the context of prevailing business conditions and composition of the Board. The qualifications to be considered in the selection of director nominees include those set forth in the charter of this committee and have the objective of assembling a Board that brings to the Company a variety of perspectives and skills derived from high quality business and professional experience.

3. Board Definition of What Constitute Independence for Non-Employee Directors
No relationship between any non-employee director and the Company should be of a nature that could compromise the independence of any Board member in governing the affairs of the Company. The determination of what constitutes independence for a non-employee director in any individual situation shall be made by the Board in light of the totality of facts and circumstances relating to such situation and in compliance with the requirements of Nasdaq’a and ArcaEx’s applicable listing standards and other applicable rules and regulations.

4. Procedure for Selecting New Director Candidates
The Board is responsible for selecting its members, subject to stockholder approval, but delegates the screening process to the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee will review a reasonable number of candidates for director recommended by stockholders who satisfy the notice and other applicable provisions set forth the Company’s bylaws. Candidates so nominated will be reviewed using the same process and standards for reviewing Board recommended candidates.

5. Directors Who Change Their Job Responsibilities
A Board member who ceases to be actively employed in his or her principal business or profession, or experiences other changed circumstances that could pose a conflict of interest, diminish his or her effectiveness as a Board member, or otherwise be detrimental to the Company, is expected to notify the Board. The Board in its discretion will determine whether such member should continue to serve as a director for an unexpired term or any future terms, and may request that such director resign.

6. Term Limits/Retirement Age
No term limits or retirement age for directors have been established. The Board will evaluate each director’s effectiveness during his or her prior term before nominating such director for re-election.