Nominating and Governance Charter

Introduction

The Nominating and Governance Committee of the Board of Directors (the "Committee") of DayStar Technologies, Inc. (the "Company") has the responsibility to determine the slate of nominees for election to the Company's Board of Directors, to recommend candidates to fill vacancies occurring between annual shareholder meetings, to review, evaluate and recommend changes to the Company's corporate governance guidelines, and to review the Company's policies and programs that relate to matters of corporate responsibility. The Committee also assists the Board in conducting evaluations for the Company's executive officers and evaluations of the effectiveness of the Board as a whole.

Membership

The Committee is composed of a minimum of three, but not more than five directors, all of whom are independent (as defined by applicable laws, regulations, and listing requirements) non-employee, outside (as defined by Rule 16b of the Securities and Exchange Act of 1934 and Section 162(m) of the Internal Revenue Code) directors as appointed by the Board of Directors. The Board may designate one or more independent directors as alternate members of the Committee, who may replace any absent or disqualified member or members at any meetings of the Committee.

Operations

The Committee meets at least three times each year. The Committee shall meet at the call of its Chairperson, preferably in conjunction with regular Board meetings as appropriate to bring matters before the Board. Meetings and actions of the Committee will be governed by, and held and taken in accordance with, the provisions of Section 4.5 of the Company's Amended and Restated Bylaws. The Chairperson of the Committee shall be responsible for leadership of the Committee, including preparing the agenda, presiding over Committee meetings, making Committee assignments and reporting the Committee's actions to the Board. The Committee shall keep written minutes of its meetings, which shall be recorded or filed with the books and records of the Company. Any member of the Board shall be provided with copies of such Committee minutes if requested.

Authority

The Committee will have the resources and authority necessary to discharge its duties and responsibilities. The Committee has the sole authority to retain, compensate and terminate consultants and advisors to assist the Committee in fulfilling its responsibilities, including conducting or authorizing investigations into or studies of corporate governance matters. The Committee shall have sole authority to retain and terminate any search firm to be used to identify director or officer candidates, including the authority to negotiate and approve the fees and retention terms of such search firm. The Committee shall have authority to delegate responsibilities listed herein to subcommittees of the Committee if the Committee determines such delegation would be in the best interest of the Company. The Committee may ask members of management or others whose advice and counsel are relevant to address the issues then being considered by the Committee. Any communications between the Committee and legal counsel in the course of obtaining legal advice will be considered privileged communications of the Company and the Committee will take all necessary steps to preserve the privileged nature of those communications.

The Nominating and Governance Committee, in order to assist the Board in the discharge of its fiduciary responsibilities relating to determining the slate of nominees for election to the Company's Board of Directors, drafting and implementing the Company's corporate governance guidelines, and conducting evaluations for the Company's executive officers and evaluations of the effectiveness of the Board as a whole, will:

  1. Determine the desired qualities of Board members to ensure appropriate board composition, including candidate independence as defined by applicable stock exchange regulations;
  2. Identify, interview, and certify qualified candidates, whether identified by the Board or a shareholder, as potential Board members or in the event of a vacancy before the Annual Shareholder Meeting, prospective director candidates to the Board;
  3. Develop plans regarding the size and composition of the Board and its committees and evaluate Board performance, including conduct of Board meetings and the adequacy and timeliness of information provided to Board members for meetings;
  4. Review and assess management succession plans;
  5. Develop and recommend corporate governance policies and principles applicable to the Company, review established corporate governance guidelines on an annual basis, monitor trends in corporate governance principles, and assist the Board in implementing those practices
  6. Undertake such other specific duties as the Board of Directors may from time-to-time prescribe.

Responsibilities

The principal responsibilities of the Committee include:

A. Board Candidates and Nominees

  1. Propose nominees for election by the shareholders at the Annual Shareholder Meeting to the Board, whether by the Board or by a shareholder in accordance with the criteria set out in Exhibit B to this Charter, and prospective director candidates in the event of the vacancy or a change in Board composition requirements;
  2. Periodically review and develop criteria for the selection of new directors and nominees for vacancies on the Board, including procedures for reviewing potential nominees proposed by shareholders, in accordance with the current criteria set out in Exhibit A to this Charter;
  3. Review and propose to the Board the desired experience, mix of skills and other qualities to assure appropriate Board composition, taking into account current Board members and the specific needs of the Company and the Board, in accordance with the current criteria set out in Exhibit A to this Charter;
  4. Conduct candidate searches, interview prospective candidates and conduct programs to introduce candidates to the Company, its management and operations, confirm the appropriate level of interest of such candidates, and certify that the candidates meet the minimum criteria for Board membership;
  5. Recommend to the Board qualified Board candidates who bring the background, knowledge, experience, skill sets and expertise that would strengthen and increase the diversity of the Board;
  6. Review whether a Board member is suitable for continued service as a director when he or she has a significant change in status, such as an employment change, and recommend whether or not such director should be re-nominated;
  7. Work with senior management to provide an orientation and education program for directors.

B. Board and Committees

  1. Periodically review and recommend to the Board changes as appropriate, including policies and procedures pertaining to the roles, responsibilities, tenure and removal of directors;
  2. Monitor the size and composition of the Board members and determine whether or not each director and prospective director is an "independent director," and that the majority of the directors are "independent directors" within the meaning of any rules and laws applicable to the Company;
  3. Review and evaluate potential conflicts of interests that may arise between the Company and any director or member of the Company's senior management;
  4. Review the need for changes in this Charter and recommend any proposed changes to the Board for approval; and
  5. Recommend to the Board establishment of such special committees as may be necessary or appropriate to address ethical, legal or other matters that may arise.
  6. Annually assess its performance to confirm that it is meeting its responsibilities under this Charter.

C. Evaluations and Management Development

  1. Develop a process for and to assist the Board with conducting evaluations of the effectiveness of the Board as a whole;
  2. Develop a process for and to assist the Board with conducting evaluations of the Company's management;
  3. Review and assess the Company's management succession plans to help assure proper management planning; and
  4. Review the Chief Executive Officer's recommendations for senior officer positions, and to make recommendations to the Board, as requested.

D. Corporate Governance

Each year, the Committee shall:

  1. Review the advisability or need for any changes in the number and composition of the Board;
  2. Review the advisability or need for any changes in the number, charters or titles of committees of the Board;
  3. Recommend to the Board the composition of each committee of the Board and, if in its discretion it so desires, the individual director to serve as chairperson of each committee;
  4. Procure that the chairperson of each committee report to the Board about his/her committee's annual evaluation of its performance and evaluation of its charter;
  5. Receive comments from all directors and report to the Board an assessment of the Board's performance, to be discussed with the full Board following the end of each fiscal year; and
  6. Review and reassess the adequacy of the Corporate Governance Principles of the Company and recommend any proposed changes to the Board for approval.