Document:

exh_1042.htm

Exhibit 10.42

 

NETSOL TECHNOLOGIES, INC.

CHARTER OF THE NOMINATING AND CORPORATE GOVERNANCE 

COMMITTEE ADOPTED AS RESTATED AS OF SEPTEMBER 10, 2013

 

	
I.

	
PURPOSE OF THE COMMITTEE

 

The purposes of the Nominating and Corporate Governance Committee (the "Committee") of the Board of Directors (the "Board") of NetSol Technologies, Inc. (the "Company") shall be to recommend to the Board individuals qualified to serve as directors of the Company and on committees of the Board; to advise the Board with respect to the Board composition, procedures and committees; to develop and recommend to the Board a set of corporate governance principles applicable to the Company; and to oversee the evaluation of the Board and the Company's management.

 

	
II.

	
COMPOSITION OF THE COMMITTEE

 

The Committee shall be comprised of three or more directors who qualify as independent directors ("Independent Directors") under the listing standards of The Nasdaq Stock Market, Inc. (the “Nasdaq”).   The members of the Committee shall be determined from time to time by resolution of the Board. Vacancies on the Committee shall be filled by majority vote of the Board at the next meeting of the Board following the occurrence of the vacancy. No member of the Committee shall be removed except by majority vote of the Independent Directors then in office.

 

	
III.

	
MEETINGS AND PROCEDURES OF THE COMMITTEE

 

The Committee shall meet at least once annually or more frequently as circumstances require. The Board shall designate one member of the Committee as its Chairperson. The Chairperson of the Committee or a majority of the members of the Committee may call a special meeting of the Committee. A majority of the members of the Committee present in person or by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other shall constitute a quorum.  The Committee may form subcommittees for any purpose that the Committee deems appropriate and may delegate to such subcommittees such power and authority as the Committee deems appropriate; provided, however, that no subcommittee shall consist of fewer than two members; and provided further that the Committee shall not delegate to a subcommittee any power or authority required by any law, regulation or listing standard to be exercised by the Committee as a whole.  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.  Following each of its meetings, the Committee shall deliver a report on the meeting to the Board, including a description of all actions taken by the Committee at the meeting. The Committee shall keep written minutes of its meetings, which minutes shall be maintained with the books and records of the Company.

 

The Committee Chair shall have the ability to cast a tie-breaking vote in the event of a tied vote of the Committee.

  

  

  

That the Company augment its insider trading policy to address trading after the conclusion of each reporting period to prevent senior management from trading on the open market in the Company’s securities from the end of a quarter until the filing of the Company’s report and from 30 days prior to the filing of the Company’s annual report until the filing of the report.  The Company’s other insider trading policies shall be unaffected by this augmentation and are equally applicable during these “black-out” periods.

 

	
IV.

	
DUTIES OF THE COMMITTEE

 

A. Board Candidates and Nominees

 

The Committee shall have the following goals and responsibilities with respect to Board candidates and nominees:

 

(a) To establish procedures for evaluating the suitability of potential director nominees proposed by management or shareholders.

(b) To recommend to the Board and for approval by a majority of Independent Directors the director nominees for election by the stockholders or appointment by the Board, as the case may be, pursuant to the Bylaws of the Company, which recommendations shall be consistent with the Board's criteria for selecting new directors. Such criteria 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 Nasdaq listing requirement.

(c) 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.

(d) To encourage participation in selection of board members, stockholders can present their nominations for a member of the Board of Directors to the Committee by providing a notice of name and qualification of the nominee to the Chairman of the committee by mail or delivery received at the principal executive offices of the Company not less than ninety (90) days nor more than one hundred and twenty (120) days prior to the anniversary date of the immediately preceding annual meeting of Stockholders.

 

B. Board Composition and Procedures

 

The Committee shall have the following goals 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 the Nasdaq.

(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 and structure of Board meetings.

(d) 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 goals 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 of Directors, 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 committee memberships and/or chairpersonships, and to report any recommendations to the Board.

(d) To recommend that the Board establish such special committees as may be desirable or necessary from time to time in order to address ethical, legal or other matters that may arise. The Committee's power to make such a recommendation under this Charter shall be without prejudice to the right of any other committee of the Board, or any individual director, to make such a recommendation at any time.

 

D. Corporate Governance

 

The following shall be the goals and responsibilities of the Committee with respect to corporate governance:

 

(a) To develop and review periodically, and at least annually, the corporate governance principles adopted by the Board to assure that they are appropriate for the Company and comply with the requirements of the Nasdaq, 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.

 

E. Evaluation of the Board

 

The Committee shall be responsible for overseeing the evaluation of individual directors and the Board as a whole. The Committee shall establish procedures to allow it to exercise this oversight function.

 

	
IV.

	
EVALUATION OF THE COMMITTEE

 

The Committee shall, on an annual basis, evaluate its performance under this Charter. In conducting this review, the Committee shall evaluate whether this 

  

  

  

Charter appropriately addresses the matters that are or should be within its scope. The Committee shall address all matters that the Committee considers relevant to its performance, including at least the following: the adequacy, appropriateness and quality of the information and recommendations presented by the Committee to the Board, the manner in which they were discussed or debated, and whether the number and length of meetings of the Committee were adequate for the Committee to complete its work in a thorough and thoughtful manner.

 

The Committee shall deliver to the Board a report setting forth the results of its evaluation, including any recommended amendments to this Charter and any recommended changes to the Company's or the Board's policies or procedures.

 

	
V.

	
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 search firm to be used to identify director candidates, including sole authority to approve the search firm's fees and other retention terms, such fees to be borne by the Company.exh_1043.htm

Exhibit 10.43

 

NETSOL TECHNOLOGIES, INC.

AUDIT COMMITTEE CHARTER

ADOPTED AS RESTATED SEPTEMBER 10, 2013

I.           PURPOSE

The Audit Committee is created by the Board of Directors (the “Board”) of NetSol Technologies, Inc. (the “Company”) to:

	
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assist the Board in its oversight of:

	 	
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the integrity of the financial statements of the Company;

	 	
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the qualifications, independence and performance of the Company’s independent auditors;

	 	
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compliance by the Company with legal and regulatory requirements; and,

	 	
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providing the Board such additional information and materials as it deems necessary to make the Board aware of significant financial matters that require the attention of the Board aware of significant financial matters that require the attention of the Board.

	
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prepare the audit committee report that Securities and Exchange Commission rules require to be included in the Company’s annual proxy statement.

In addition, the Audit Committee will undertake those specific duties and responsibilities enumerated below and such other duties as the Board from time to time may prescribe.

II.           MEMBERSHIP

 

The Audit Committee shall consist of at least three members, comprised of independent directors meeting the independence requirements of Nasdaq Stock Market (“Nasdaq”) or other exchange on which the Company's stock may be listed, the Sarbanes-Oxley Act of 2002 (the “Act”) and the rules and regulations promulgated by the SEC pursuant to the Act, and applicable laws and regulations.  Each member of the Committee shall have an understanding of fundamental financial statements and at least one member shall be financially sophisticated in accordance with Nasdaq rules.  At least one member of the Committee shall be a financial expert as defined under the applicable SEC regulations.  The Nominating Committee shall recommend nominees for appointment to the Audit Committee annually and as vacancies or newly created positions occur. Any vacancy on the Committee shall be filled by majority vote of the Board at the next meeting of the Board following the occurrence of the vacancy.  No member of the Committee shall be removed except by majority vote of the directors that are independent pursuant to the rules and regulations of Nasdaq, any other exchange on which the Company's stock may be listed, and the SEC.

 

Audit Committee members shall be appointed by the Board and may be removed by the Board at any time.  A chairperson of the Audit Committee may be elected by a majority vote of the members of the Committee or by the Board.

  

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III.           AUTHORITY AND RESPONSIBILITIES

In addition to any other responsibilities that may be assigned from time to time by the Board, the Audit Committee is responsible for the following matters:

Independent Auditors

	
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The Audit Committee has the sole authority to appoint, retain, oversee and terminate the independent auditors of the Company (subject, if applicable, to shareholder ratification) including sole authority to approve all audit engagement fees.  As part of such oversight, the Audit Committee shall review and approve the scope of the independent auditors’ annual audit plan.

	
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The Audit Committee shall pre-approve each no-audit service that is allowable under applicable laws and regulations to be provided by the Company’s independent auditors.  The Audit Committee may consult with management in the decision-making process regarding such non-audit services, but may not delegate its authority to management.  The Audit Committee may, from time to time, delegate its authority to pre-approve non-audit services on a preliminary basis to one or more Audit Committee members, provided that such designees present any such approvals to the full Audit Committee at the next Audit Committee meeting.

	
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The Audit Committee shall evaluate the independent auditors’ independence, including, by having the independent auditors provide a written report to the committee describing all relationships between the independent auditors and the Company, consistent with the Independence Standard Board Standard 1 and engaging in a dialogue with the independent auditors with respect to any relationships or services that could impact the objectivity and independence of the independent auditor.

	
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The Audit Committee shall review and discuss as required with the independent auditors:

	 	
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the critical accounting policies and practices of the Company;

	
  

	
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whether Section 10A of the Securities Exchange Act of 1934 h as been implicated;

	
  

	
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audit problems or difficulties and management’s response thereto, including those matters required to be discussed with the Audit Committee by the auditors pursuant to Statement on Auditing Standards No. 61; and,

	
  

	
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suggested changes to the Company’s auditing and accounting principles and practices.

  

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Financial Statements; Disclosure and Compliance Matters

·           The Audit Committee shall review:

	
  

	
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the annual audited financial statements, prior to the Company’s filing of its Form 10-K

	
  

	
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the quarterly financial statements, prior to the Company’s filing of its Form 10-Q;

	 	
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quarterly financial results before they are released to the public;

	
  

	
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any major issues regarding accounting principles and financial statements presentations, including any significant changes in the Company’s selection or application of accounting principles;

	
  

	
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regulatory and accounting initiatives or actions as applicable to the Company (including any SEC investigations or proceedings).

	
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The Audit Committee shall review with the CEO and CFO of the Company, based on their evaluation of the Company’s disclosure controls and procedures, all significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data; and any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls.

	
  

	
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Establishing and maintaining procedures, as set forth in Annex A hereto, for the receipt, retention and treatment of complaints received by the Corporation from its employees regarding financial statement disclosures, accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable financial statement disclosures, accounting, internal accounting controls or auditing matters;

	
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The Audit Committee shall review the Company’s Code of Conduct and Ethics and approve any waivers to this Code for an executive officer or director.  The waiver must be in writing to the Board of Directors.

	
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The Audit Committee shall review and approve any and all related party arrangements and agreements and all potential conflicts of interests of directors and officers brought to their attention (including all transactions required to be disclosed by Item 404(a) of Regulation S-K).

IV.           REPORTING TO THE BOARD

	
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The Audit Committee shall report to the Board quarterly or more if the committee determines it is appropriate to do so.  This report may include a review of any issues that arise with respect to the quality or integrity of the Company’s financial statements, the Company’s compliance with legal and regulatory requirements, the qualifications,

  

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independence and performance of the Company’s independent auditors, and any other matters that the Audit Committee deems appropriate or is requested to be included by the Board.

 

	
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The Audit Committee shall review and assess the adequacy of this charter on at least an annual basis and recommend any proposed changes to the Board.

V.           PROCEDURES

The Audit Committee shall meet as often as it determines is appropriate to carry out is responsibilities under this charter, but not less frequently than quarterly.  The Chairman of the Audit Committee, in consultation with the other committee members, shall determine the frequency and length of the committee meetings and shall se meeting agendas consistent with this charter.

The Audit Committee shall meet separately, periodically, with management and with the independent auditors.  The Audit Committee also shall meet, at least quarterly, without management.

The Audit Committee is authorized (without seeking board approval) to retain special legal, accounting or other advisors and may require any officer or employee of the Company or the Company’s outside counsel or independent auditors to meet with any members of, or advisors to, the Audit Committee as it deems appropriate to conduct its own investigations.  The Audit Committee may delegate this authority to conduct an investigation to any individual member of the Audit Committee.

The Audit Committee shall maintain written minutes of its meetings, which minutes shall be filed with the minutes of the meetings of the Board.

The Audit Committee may delegate its authority to subcommittees or individuals on the Audit Committee, to the extent allowable under law, when it deems appropriate and in the best interests of the Company.

The Audit Committee Chair may cast a tie-breaking vote in the event of a tied vote of the Committee.

 

VI.           LIMITATIONS INHERENT IN THE AUDIT COMMITTEE’S ROLE

It is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with GAAP.  Furthermore, while the Audit Committee is responsible for reviewing the Company’s policies and practices with respect to risk assessment and management, it is the responsibility of the CEO and senior management to determine the appropriate level of the Company’s exposure to risk.

VII.           EVALUATION OF THE COMMITTEE

The Committee shall, on an annual basis, evaluate its performance under this Charter. In conducting this review, the Committee shall evaluate whether this Charter appropriately addresses the matters that are or should be within its scope. The Committee shall address all 

  

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matters that the Committee considers relevant to its performance, including at least the following: the adequacy, appropriateness and quality of the information and recommendations presented by the Committee to the Board, the manner in which they were discussed or debated, and whether the number and length of meetings of the Committee were adequate for the Committee to complete its work in a thorough and thoughtful manner.

The Committee shall deliver to the Board a report setting forth the results of its evaluation, including any recommended amendments to this Charter and any recommended changes to the Company's or the Board's policies or procedures.

 

  

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Annex A

 

Procedures for the Anonymous Submission of Complaints or Concerns Regarding Financial Statement Disclosures, Accounting, Internal Accounting Controls or Auditing Matters

 

The following is the procedure for the confidential, anonymous submission by employees of NetSol Technologies, Inc. [and its subsidiaries] (the "Corporation") of concerns regarding questionable accounting, internal control, auditing or related matters (“Concerns”):

 

1. The Corporation shall forward to the Audit Committee of the Board of Directors (the “Audit Committee”) any complaints that it has received regarding financial statement disclosures, accounting, internal accounting controls or auditing matters.

 

2. Any employee of the Corporation may submit, on a confidential, anonymous basis if the employee so desires, any Concerns by setting forth such Concerns in writing and forwarding them in a sealed envelope to the Chair of the Audit Committee, in care of the Corporation's Corporate Secretary (the “Secretary”), such envelope to be labeled with a legend such as:  “Anonymous Submission of Complaint or Concern”  If an employee would like to discuss any matter with the Audit Committee, the employee should indicate this in the submission and include a telephone number at which he or she might be contacted if the Audit Committee deems it appropriate.  The Corporate Secretary’s address is NetSol Technologies, Inc. 23901 Calabasas Road, Suite 2072, Calabasas, CA 91302.  Any such envelopes received by the Secretary shall be forwarded promptly to the Chair of the Audit Committee.

 

3. The Secretary shall prepare an executive summary of the contents of each submission with respect to Concerns that do not specifically allege participation in wrongdoing by the  Corporation's Chief Executive Officer (the “CEO”) and send it to the CEO. The CEO shall promptly investigate the subject of each such executive summary and report his findings in writing to the Chairman of the Audit Committee with recommendations, if any. The Secretary shall send a copy of each submission with respect to Concerns that specifically allege participation in wrongdoing by the CEO both to the Chairman of the Audit Committee and to the CEO.

 

4. At each of its meetings, including any special meeting called by the Chair of the Audit Committee following the receipt of any information pursuant to this Annex, the Audit Committee shall review and consider any such complaints or concerns that it has received and take any action that it deems appropriate in order to respond thereto.

 

5. The Audit Committee shall retain any such complaints or concerns for a period of no less than 7 years.

 

6.           The Company’s secretary shall confirm that all subsidiaries receive copies of the charters and instructions on submitting concerns. Any such concerns shall be submitted to the subsidiaries by the Company’s secretary.

 

7.           The Chairman of the Committee is permitted to cast a tie-breaking vote in the event of a tie on the Committee.

  

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8. This Annex A shall appear on the Corporation's website as part of this Charter.

 

 

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