MSM Imperial Investment Group

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MSM IMPERIAL INVESTMENT GROUP INC
GOVERNANCE GUIDELINES

1. Director Qualifications

The Board will have a substantial majority of directors who meet the criteria for independence required by the New York Stock Exchange and applicable laws and regulations. The Governance and Nominating Committee is responsible for reviewing with the Board, on an annual basis, the requisite skills and characteristics of potential new Board members as well as the composition of the Board as a whole. This assessment will include members' qualification as independent, as well as consideration of character, judgment, diversity, age, skills, including financial literacy, and experience in the context of the needs of the Board. Nominees for directorship will be selected by the Governance and Nominating Committee and approved by the overall Board in accordance with such policies and principles, as the Board shall promulgate upon recommendation of the Committee. The invitation to join the Board should be extended by the Chair of the Governance and Nominating Committee and the Chairman of the Board on behalf of the entire Board of Directors.

It is the sense of the Board that a size of 3 to 11 members is appropriate and that the Board should seek to reach that size over time. The Board would be prepared to increase the size of the Board to greater than 3 in order to accommodate the availability of a candidate with outstanding credentials or relevant skills or experience.

It is the sense of the Board that individual directors who change the principal responsibility they held when they were elected to the Board should volunteer to resign from the Board in order to give the Board an opportunity through the Governance and Nominating Committee to review the continued appropriateness of Board membership under the circumstances. It is not the sense of the Board that in every instance the directors who retire or change from the position they held when the came on the Board should necessarily leave the Board.

Each director should be able and prepared to devote sufficient time and effort to his or her duties as a director. Directors should advise the Chairman of the Board and the Chair of the Committee on Governance and Nominating in advance of accepting an invitation to serve on another public company board. No director may serve as a director past his or her 75th birthday.

The Board does not believe it should establish term limits. Directors who have served on the Board for an extended period of time are able to provide valuable insight into the operations and future of the Company based on their experience with and understanding of the Company's history, policy and objectives. The Board believes that, as an alternative to term limits, it can ensure that the Board continues to evolve through the evaluation and nomination process described in these Guidelines. As an alternative to term limits, the Governance and Nominating Committee will review each director's continuation on the Board by Julay 30 of the year prior to the year such director's term of office ends.

2. Director Responsibilities

The basic responsibility of the directors is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its shareholders. In discharging that obligation, directors should be entitled to rely on the honesty and integrity of the Company's senior executives and its outside advisors and auditors. The directors shall also be entitled to have the Company purchase reasonable directors' and officers' insurance on their behalf, (subject to Section 8.3 ARTICLE VIII) to the benefits of indemnification to the fullest extent permitted by law, Bylaws and any indemnification agreements, and to exculpation as provided by state law and the Company's Article of Incorporation.

Directors are expected to attend Board meetings and meetings of committees on which they serve, and to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. To the extent feasible, information and data that are important to the Board's understanding of the business to be conducted at a Board or committee meeting should be distributed in writing to the directors before the meeting and Directors should come prepared to contribute substantively at the meeting by reviewing these materials in advance of the meeting.

The Board has no general policy with respect to the separation of the offices of Chairman of the Board and the President and, if such offices are separated, whether the Chairman of the Board should be selected from the non-employee directors or be an employee. Subject to the succession arrangements provided for in Section 3.9 of Article III of the Bylaws and the employment agreements referred to therein, the Board believes that this issue is part of the succession planning process and that it is in the best interests of the Company for the Board to make a determination of whether the offices of Chairman of the Board and President should be separated when it elects a new President or Chairman of the Board.

The Chairman and the President will jointly recommend to the Board the long-term strategic plan for the Company, major acquisitions and divestitures, and major changes to the Company's capital structure. With respect to all other matters, the President will, in consultation with the Chairman, arrange the agenda for Board meetings and shall report to the Board and arrange for other executives and advisors to report to the Board. Each Board member is free to suggest the inclusion of items on the agenda of any Board meeting. Each Board member is free to raise at any Board meeting subjects that are not on the agenda for that meeting. The Board will review the Company's long-term strategic plans, including succession plans, and the principal issues that the Company will face in the future during at least one Board meeting each year or as determined by the Board of Directors.

The non-employee directors (defined below) will meet in executive session at each meeting. The Chairman of the Governance and Nominating Committee shall preside at these meetings and that director's name will be disclosed in the annual proxy statement. Each executive session may include (1) a discussion of the performance of the Chairman and the President, (2) matters concerning the relationship of the Board with the management directors and other members of senior management, and (3) such other matters as the non-employee directors deem appropriate. No formal action of the Board shall be taken at these meetings, although the non-employee directors may subsequently recommend matters for full consideration by the Board of Directors. The Board may invite guest attendees for the purpose of making presentations, responding to questions by the directors, or providing counsel on specific matters within their areas of expertise. For purposes of these Guidelines, non-employee directors shall mean only those directors who (1) are not current employees of MSM Imperial Investment Group Inc, or (2) have not been employees of MSM Imperial Investment Group Inc at any time during the past five years.

3. Board Committees

The Board will have 5 Committees, such as; Governance and Nominating Committee, an Audit Committee, a Compensation Committee, a Finance Committee and a Public Policy Committee. The Board may add new committees or remove existing committees, as it deems advisable in the fulfillment of its primary responsibilities. Each committee will perform its duties as assigned by the Board of Directors in compliance with Company bylaws and the Committee's charter. Committee duties may be described briefly as follows:

The Compensation Committee purpose is to discharge the Board's responsibilities relating to compensation of the Company's executives, to produce an annual report on executive compensation for inclusion in the Company's proxy statement, and to oversee and advise the Board on the adoption of policies that govern the Company's compensation programs, including stock and benefit plans.
The Audit Committee of the Board of Directors assists the Board of Directors in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing, and reporting practices of the Company, and such other duties as directed by the Board. The Committee's purpose is to oversee the accounting and financial reporting processes of the Company and the audits of the Company's financial statements. The Committee's function includes a particular focus on the qualitative aspects of financial reporting to shareholders, and on the Company's processes to manage business and financial risk, and for compliance with significant applicable legal, ethical, and regulatory requirements. The Committee is directly responsible for the appointment, compensation, and oversight of the public accounting firm engaged to prepare or issue an audit report on the financial statements of the Company.
The Finance Committee purpose is to monitor the present and future capital requirements and opportunities pertaining to the Company's business and to review and provide guidance to the Board and management about all proposals concerning major financial policies of the Corporation.
The Governance and Nominating Committee purpose is to determine the slate of director nominees for election to the Company's Board of Directors, to identify and recommend candidates to fill vacancies occurring between annual shareholder meetings, and to review, evaluate and recommend changes to the Company's Corporate Governance Guidelines.
The Public Policy Committee purpose is to advise the Board of current and emerging public policy issues, both domestic and international; and to assist the Board in the development and review of policies and budgets in respect of contributions, including but not limited to, contributions to organizations whose primary purpose is charitable, civic, cultural, educational, and/or political. Contributions shall be governed by the annual budgets for charitable and political contributions as approved by the Committee.

The Chair of each committee, in consultation with the committee members, will determine the frequency and length of the committee meetings consistent with any requirements set forth in the committee's charter. The Chair of each committee, in consultation with the appropriate members of the committee and management, will develop the committee's agenda for each meeting. At the beginning of the year each committee will establish a schedule of agenda subjects to be discussed during the year (to the degree these can be foreseen). The schedule for each committee will be furnished to all directors. The Board may, from time to time, establish or maintain additional committees, as it deems necessary or appropriate.

4. Director Access to Officers, Employees and Independent Advisors

Directors have full and free access to officers and employees of the Company. Any meetings or contacts that a director wishes to initiate with officers or other Company employees may be initiated directly by such director, or arranged, at such director's option, through the Chairman or the Secretary or a Board Committee. The directors will use their judgment to ensure that any such contact is not disruptive to the business operations of the Company and will, to the extent not inappropriate, copy the President on any written communications between a director and an officer or employee of the Company. Such communications will not be directive other than as relates to routine administrative matters. The Board expects regular attendance and participation at each Board meeting of senior officers of the Company. The Board and each committee have the power to hire independent legal, financial or other advisors, as they may deem necessary, without consulting or obtaining the approval of any officer of the Company.

5. Director Compensation

The Compensation Committee in accordance with the policies will determine the form and amount of director compensation and principles set forth in its charter, and the Compensation Committee will conduct an annual review of director compensation, such review to include outside advice when appropriate.

6. Director Stock Ownership

The Board believes that, in order to align the interests of directors and shareholders, directors should have a significant financial stake in the Company. Each director who has served on the board for at least 3 years should own a minimum of 3,000 shares of common stock. The Board will evaluate whether exceptions should be made for any director on whom this requirement would impose a financial hardship.

7. Director Orientations and Continuing Education

All new directors must participate in the Company's Orientation Program, which should be conducted within two months of each new director's election. This orientation will include presentations by senior management to familiarize new directors with the Company's strategic plans, its significant financial, accounting and risk management issues, its compliance programs, its Code of Business Conduct and Ethics, its principal officers, and its internal and independent auditors. In addition, the Orientation Program will include visits to Company headquarters and, to the extent practical, certain of the Company's significant facilities. All other directors are also invited to attend the Orientation Program. The Board will also consider whether or not continuing education for all directors may be warranted. The Company will pay reasonable expenses for a Director's participation in continuing education programs approved by the Board of Directors.

8. President Evaluation

The Governance and Nominating Committee will develop criteria for the evaluation of management, including the President. Specific performance goals and objectives for the President 's compensation purposes will be determined by the Compensation Committee. The Governance and Nominating Committee and the Compensation Committee will each valuate the President's performance in light of the respective criteria, goals and objectives established by such committee, and will report to the non-employee directors meeting in executive session. The non-employee directors will evaluate the overall performance of the President, taking into account the reports of each such committee. The Chairs of the Committee on Governance and Nominating and the Compensation Committee will discuss the results of the evaluations with the President.

9. Management Succession

The Governance and Nominating Committee shall oversee succession planning and shall make an annual report to the Board. The entire Board will work with the Governance and Nominating Committee to nominate and evaluate potential successors to the President. The President should at all times make available his or her recommendations and evaluations of potential successors, along with a review of any development plans recommended for such individuals.

10. Annual Board Performance Evaluation

The Board will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. Each committee's shall develop Board evaluation policies and procedures and shall report annually to the Board with an assessment of the Board's performance. This will be discussed with the full Board following the end of each fiscal year. The assessment will include an assessment of the Board's contribution to the Company and specifically focus on areas in which the Board or management believes that the Board could improve.

11. Publication

These Guidelines, along with the Corporate Code of Business Conduct and Ethics, and each committee charter shall be published by the Company in appropriate print and electronic vehicles.