The Board of Directors of KAPCO|VALTEC has adopted the following principles of corporate governance:

1. A majority of the KAPCO|VALTEC board members will be independent directors. This requirement will be waived when there is a Board vacancy caused by the resignation, death, incapacity or removal of a Director.


2. All directors are selected on the basis of their ability to contribute to positive corporate governance through their values, knowledge and skills.


3. The Board of Directors has established a committee of independent directors who are responsible for overseeing the audit functions and financial reporting compliance of KAPCO|VALTEC (the “Audit Committee”). Members of the Committee have the skills, experience and financial expertise to fulfill this function.


4. The Board of Directors has established a committee of independent directors who are responsible for overseeing executive compensation and evaluating the performance of senior executives (the “Compensation Committee”).
5. The Board of Directors and committees have authority to directly hire outside consultants as needed to properly fulfill their responsibilities.


6. The Board of Directors has reviewed and approved KAPCO|VALTEC Code of Business Conduct.


7. The Board of Directors has created an environment to promote effective corporate governance and to represent the interests of the shareholders in all matters.