Current Report

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
 
____________________
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported):  September 8, 2009
 
ZAGG Incorporated
 
(Exact name of registrant as specified in its charter)
 
Nevada
000-52211
20-2559624
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)

3855 South 500 West, Suite J Salt Lake City, Utah
84115
(Address of principal executive offices)
(Zip Code)
 
Registrant’s telephone number, including area code:   (801) 263-0699

___________________________________________________
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]
Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
   
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 

SECTION 5 – CORPORATE GOVERNANCE AND MANAGEMENT

Item 5.02     Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

Director Appointment

On September 8, 2009, our board of directors appointed Mr. Ed Ekstrom to serve as a member of our board of directors and he shall serve in that capacity until the next annual meeting of the shareholders or until removed by other action as allowed by the corporate bylaws.

Prior Arrangements and Understandings

There were no arrangements or understandings between Mr. Ekstrom and any other persons pursuant to which such individual was selected as a director of our company.

Transactions with Related Persons

Mr. Ekstrom has not had any direct or indirect material interest in any transaction during the last two years, or in any proposed transaction, to which our company was or is to be a party.

Grant of Options

We granted to Mr. Ekstrom an option to purchase 220,000 shares of common stock at an exercise price of $5.05 upon his appointment to the board of directors on September 8, 2009.

Creation of Committees and Adoption of Charters

On September 8, 2009, the Board of Directors created and adopted charters for the Audit Committee, the Compensation and Stock Option Committee, and the Corporate Governance and Nominating Committee of our board of directors.  The charters are attached as Exhibits 99.1 – 99.3 and will be posted on the company’s website.

Committees Appointments

Mr. Larry Harmer has been named to the Audit Committee, Compensation and Stock Option Committee, and the Corporate Governance and Nominating Committee of our company’s board of directors. Mr. Harmer has been appointed as the chairperson of the Audit Committee by our board of directors.

 
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Our board of directors has judged and affirmatively determined that Mr. Harmer: (1) meets the definition of an “audit committee financial expert,” as such term is defined in Item 407(d)(5)(ii) of Regulation S-K and the rules and regulations promulgated by the Securities and Exchange Commission thereunder; (2) has past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in his financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities; (3) meets the criteria for independence set forth in Rule 10A-3(b)(1) of the Securities Exchange Act of 1934 and Rule 5605(a)(2) of the Nasdaq Rules; (4) has not participated in the preparation of the financial statements of our company or any current subsidiary of our company at any time during the past three years; and (5) is able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement.
 
Apart from the appointment of Mr. Harmer to the Audit Committee, Compensation and Stock Option Committee, the Corporate Governance and Nominating Committee, and as the chairperson of the Audit Committee, there are no other definitive arrangements that have been made regarding committees of our company to which Mr. Harmer is expected to be named.

In addition to the foregoing, Mr. Mr. Ekstrom and Mr. Shu Ueyama have been appointed to the Audit Committee, Compensation and Stock Option Committee, and the Corporate Governance and Nominating Committee of the board of directors.

Both Mr. Ekstrom and Mr. Ueyama (1) meet the criteria for independence set forth in Rule 10A-3(b)(1) of the Securities Exchange Act of 1934 and Rule 5605(a)(2) of the Nasdaq Rules; (2) have not participated in the preparation of the financial statements of our company or any current subsidiary of our company at any time during the past three years; and (3) are able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement.

SECTION 8 – Other Events

8.01           Other Events

The information set forth above in Item 5.02 that would qualify as an “Other Event” is hereby incorporated into this Item 8.01.

We are in the process of applying for listing on the Nasdaq Capital Market.  On July 24, 2009, we received a list of requests from the examiner of the Listing Department at Nasdaq.  The foregoing actions to create committees and appoint independent directors have been taken in furtherance of our application and in response to the requests we received.  The application process is ongoing; however, we can provide no assurance that we will be listed on Nasdaq.

We issued a press release in connection with the appointment of Ed Ekstrom to our board of directors.  The press release is attached hereto as Exhibit 99.4.

 
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SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

9.01     Financial Statements and Exhibits

Exhibit No.
Description
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ZAGG Incorporated

 
/s/ Brandon O'Brien
Brandon O’Brien
Chief Financial Officer

Date: September 10, 2009
 
 
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AUDIT COMMITTEE CHARTER

Purpose

The Audit Committee (or the "Committee") appointed by the Board of Directors (the "Board") of Zagg Incorporated (the "Company") shall oversee the accounting and financial reporting processes of the Company and the audits of the Company's financial statements. In that regard, the Audit Committee assists the Board in monitoring (1) the integrity of the financial statements of the Company, (2) the independent auditor's qualifications and independence, (3) the performance of the Company's internal audit function and independent auditors, and (4) the compliance by the Company with legal and regulatory requirements. The Audit Committee shall prepare the report required by the rules of the Securities and Exchange Commission (the "SEC") to be included in the Company's annual proxy statement.

Committee Composition and Member Qualifications

The Audit Committee shall consist of no fewer than three members. Each member of the Audit Committee shall meet the independence requirements of Rules 5605(a)(2) of The Nasdaq Stock Market, LLC Rules (the "Nasdaq Rules") and Rule 10A-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). No member of the Audit Committee shall have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the past three years. All members of the Audit Committee shall be sophisticated in financial matters and shall able to read and understand fundamental financial statements, including the Company's balance sheet, income statement and cash flow statement. In addition, at least one member of the committee shall have had past employment experience in finance or accounting, requisite professional certification in accounting or any other comparable experience or background which results in the individual's financial sophistication, including having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities, and shall be an "audit committee financial expert" as defined by the rules promulgated by the SEC.

Notwithstanding the above requirements, one director who does not meet the definition of independence as set forth in Nasdaq Rule 5605, but who does meet the criteria set forth in Section 10A(m)(3) under the Exchange Act and the rules thereunder, and who is not a current officer or employee of the Company or an immediate family member of such person, may serve for no more than two years on the Committee if the Board, under exceptional and limited circumstances, determines that such individual's membership is required by the best interests of the Company and its shareholders. Such person must satisfy the independence requirements set forth in Section 10A(m)(3) of the Exchange Act, and may not chair the Audit Committee. The use of this "exceptional and limited circumstances" exception, as well as the nature of the individual's relationship to the Company and the basis for the Board's determination, shall be disclosed by the Company in its next annual proxy statement following such determination by the Board.

 
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In addition, if an Audit Committee member ceases to be independent as defined under Rule 10A-3(b)(1) under the Exchange Act and Nasdaq Rule 5605(a)(2) for reasons outside the member's reasonable control, his or her membership on the Audit Committee may continue until the earlier of the Company's next annual shareholders' meeting or one year from the occurrence of the event that caused the failure to qualify as independent. If the Company falls out of compliance with the requirements regarding Audit Committee composition under Nasdaq Rule 5605(c)(2)(A) due to a single vacancy on the Audit Committee, and is not already relying upon the cure period with respect to a non-independent member of the Committee (as described in the previous sentence), the Company shall have until the earlier of its next annual shareholders' meeting or one year from the occurrence of the event that caused the failure in compliance to rectify the Committee's composition by filling the vacancy with a new member meeting the required qualifications. The Company shall provide notice to Nasdaq immediately upon learning of the event or circumstance that caused non-compliance with the Audit Committee composition requirements if it expects to rely on either of the provisions allowing for the cure period described above.

In addition to, not limitation of, the foregoing, the Committee's composition shall at all times comply with the relevant rules and regulations of the SEC, the Nasdaq Rules (until such time as the Company's securities are listed on an exchange other than Nasdaq), the New York Stock Exchange or any other national securities exchange to which the Company is, or may become, subject.

The members of the Audit Committee shall be appointed and may be replaced by the Board.

Meetings

The Audit Committee shall meet as often as it determines necessary but not less frequently than on a quarterly basis. The Audit Committee shall meet periodically in separate executive sessions with the Company's management, the Company's internal auditors and the Company's independent auditor, and have such other direct and independent interaction with such persons from time to time as the members of the Audit Committee deem appropriate. The Audit Committee may request that any officer or employee of the Company or the Company's outside counsel or independent auditor attend a meeting of the Audit Committee or meet with any members of, or consultants to, the Audit Committee.

Compensation

Members of the Audit Committee shall be eligible for compensation in amounts up to $5,000 per year for service thereon, such compensation to be in addition to the payments for which such members shall be eligible based upon their service as members of the Board at large.

Committee Authority and Responsibilities Generally

The Audit Committee shall have the sole authority to appoint, determine funding for, retain and oversee the Company's outside, independent auditor (subject to shareholder ratification at the annual meeting of shareholders). The Audit Committee shall be directly responsible for the compensation and oversight of the work of the independent auditor (including resolution of disagreements between the Company's management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services. The independent auditor shall report directly to the Audit Committee.

The Audit Committee shall pre-approve all auditing services, internal control-related services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, subject to the de minimis exception for non-audit services that are approved by the Audit Committee prior to the completion of the audit. The Audit Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting.

 
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The Audit Committee shall have the authority, to the extent it deems necessary or appropriate to carry out its duties, to engage and determine funding for independent legal, accounting or other advisors. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing an audit report or performing other audit, review or attest services for the Company and to any advisors employed by the Audit Committee, as well as funding for the payment of ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.

The Audit Committee shall make regular reports to the Board. The Audit Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.

Financial Statement and Disclosure Matters

The Audit Committee, to the extent it deems necessary or appropriate, shall:

§  
Review and discuss with management and the independent auditor the annual audited financial statements, including disclosures made in management's discussion and analysis, and recommend to the Board whether the audited financial statements should be included in the Company's Form 10-K.

§  
Review and discuss with management and the independent auditor the Company's quarterly financial statements prior to the filing of its Form 10-Q, including the results of the independent auditor's review of the quarterly financial statements.

§  
Discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company's financial statements, including any significant changes in the Company's selection or application of accounting principles, any major issues as to the adequacy of the Company's internal controls and any special steps adopted in light of material control deficiencies.

§  
Review and discuss with management and the independent auditor any major issues as to the adequacy of the Company's internal controls, any special steps adopted in light of material control deficiencies and the adequacy of disclosures about changes in internal control over financial reporting.

§  
Review and discuss with management (including the senior internal audit executive) and the independent auditor the Company's internal controls report and the independent auditor's attestation of the report prior to the filing of the Company's Form 10-K.

§  
Review and discuss quarterly reports from the independent auditor on:

o  
all critical accounting policies and practices to be used;
o  
all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and
o  
other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences.

 
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§  
Discuss with management the Company's earnings press releases, including the use of "pro forma" or "adjusted" non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies. Such discussions may be conducted in a general manner (consisting of discussions regarding the types of information to be disclosed and types of presentations to be made).

§  
Discuss with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company's financial statements.

§  
Discuss with management the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies.

§  
Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions on the scope of activities or access to requested information, and any significant disagreements with management.

§  
Review disclosures made to the Audit Committee by the Company's Chief Executive Officer and Chief Financial Officer during the process leading up to their certifications for the Company's Forms 10-K and 10-Q regarding any significant deficiencies in the design or operation of internal controls or material weaknesses therein, any changes in internal control over financial reporting and any fraud involving management or other employees who have a significant role in the Company's internal controls.

§  
Ensure that a public announcement of the Company's receipt of an audit opinion that contains a going concern qualification is made promptly.

§  
Review expense records of the Company's senior management.

Oversight of the Company’s Relationship with the Independent Auditor  

§  
Review and evaluate the lead partner of the independent auditor team.

§  
Obtain and review a report from the independent auditor at least annually regarding (a) the independent auditor's internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and (c) any steps taken to deal with any such issues. Evaluate the qualifications, performance and independence of the independent auditor, including considering whether the auditor's quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor's independence, and taking into account the opinions of management and internal auditors. The Audit Committee shall present its conclusions with respect to the independent auditor to the Board.

 
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§  
Obtain from the independent auditor a formal written statement delineating all relationships between the independent auditor and the Company. It is the responsibility of the Audit Committee to actively engage in a dialogue with the independent auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the auditor and for purposes of taking, or recommending that the full Board take, appropriate action to oversee the independence of the outside auditor.

§  
Ensure the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law. Consider whether, in order to assure continuing auditor independence, it is appropriate to adopt a policy of rotating the independent auditing firm on a regular basis.

§  
Recommend to the Board policies for the Company's hiring of employees or former employees of the independent auditor.

§  
Discuss with the independent auditor material issues on which the national office of the independent auditor was consulted by the Company's audit team.

§  
Meet with the independent auditor prior to the audit to discuss the planning and staffing of the audit.

Oversight of the Company’s Internal Audit Function  

§  
Review the appointment and replacement of the senior internal auditing executive.

§  
Review the significant reports to management prepared by the internal auditing department and management's responses.

§  
Discuss with the independent auditor and management the internal audit department responsibilities, budget and staffing and any recommended changes in the planned scope of the internal audit.

§  
Implement appropriate systems to coordinate the internal audit function and the internal audit staff with the Company's independent auditor.

Compliance Oversight Responsibilities

§  
Obtain from the independent auditor assurance that Section 10A(b) of the Exchange Act has not been implicated (i.e., a finding by the independent auditor that an illegal act has occurred).

§  
Obtain reports from management, the Company's senior internal auditing executive and the independent auditor that the Company and its subsidiary/foreign affiliated entities are in conformity with applicable legal requirements and the Company's Code of Ethics. Advise the Board with respect to the Company's policies and procedures regarding compliance with applicable laws and regulations and with the Company's Code of Ethics.

§  
Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

§  
Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports which raise material issues regarding the Company's financial statements or accounting policies.

§  
Discuss with the Company's General Counsel legal matters that may have a material impact on the financial statements or the Company's compliance policies.

 
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Compliance With Rules of the SEC and the Company’s Exchange

The Audit Committee shall comply with the relevant rules and regulations of the SEC, the Nasdaq Rules (until such time as the Company's securities are listed on an exchange other than Nasdaq), the New York Stock Exchange or any other national securities exchange to which the Company is, or may become, subject.

Limitation of Audit Committee’s Role  

Although the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company's financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. Those are the responsibilities of the Company's management and the Company's independent auditor.

Adopted September 8, 2009
 
 
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COMPENSATION AND STOCK OPTION COMMITTEE CHARTER

Purpose

The basic responsibility of the Compensation and Stock Option Committee of the Board of Directors (the "Committee") of Zagg Incorporated (the "Company") is to review the performance and development of the management of the Company in achieving corporate goals and objectives and to assure that senior executives of the Company are compensated effectively in a manner consistent with the strategy of the Company, competitive practice, and the requirements of the appropriate regulatory bodies. Toward that end, the Committee will oversee, review and administer all compensation, equity and employee benefit plans and programs.

Composition of the Committee

The Committee will consist of two or more directors, each of whom shall be (a) an "independent director" as required by the rules of The Nasdaq Stock Market, LLC ("Nasdaq"), (b) a "Non-Employee Director" as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (c) an "outside director" within the meaning of Section 162(m) of the Internal Revenue Code, as amended (the "IRS Code"). Each appointed Committee member will be subject to annual reconfirmation by the Board of Directors of the Company (the
"Board") and may be removed by the Board at any time. The Committee's composition shall at all times comply with the relevant rules and regulations of the United States Securities and Exchange Commission ("SEC"), the Nasdaq Marketplace Rules (until such time as the Company's securities are listed on an exchange other than Nasdaq), the New York Stock Exchange or any other national securities exchange to which the Company is, or may become, subject.

Responsibilities and Duties

In carrying out its purpose, the Committee will have the following responsibilities and duties:

§  
Review annually and approve the Company's compensation strategy to ensure that employees of the Company are rewarded appropriately for their contributions to company growth and profitability.

§  
Review annually and approve corporate goals and objectives relevant to executive compensation and evaluate performance in light of those goals.

§  
Review annually and determine the individual elements of total compensation for the Chief Executive Officer and all other officers (as such term is defined in Rule 16a-1(f) under the Exchange Act) of the Company, and communicate in the annual Board Compensation and Stock Option Committee Report-- to be issued to the Board and shared with the Company's shareholders-- the factors and criteria on which the Chief Executive Officer's and all other executive officers' (as such term is defined in Rule 3b-7 under the Exchange Act ) compensation for the last year was based.

§  
Approve all special perquisites, special cash payments and other special compensation and benefit arrangements for the Company's officers.

§  
Review and recommend compensation for non-employee members of the Board, including but not limited to the following elements: retainer, meeting fees, committee fees, committee chair fees, equity or stock compensation, benefits and perquisites, subject to the restrictions on such compensation set forth in the Company's By-Laws.

 
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§  
Make and approve stock option grants and other discretionary awards under the Company's stock option or other equity incentive plans to all persons who are Board members or officers.

§  
Review and implement an appropriate combination of cash compensation (base salary and bonus) and non-cash compensation designed to give performance incentives based upon the Company's revenues, earnings, common stock price or other appropriate criteria.

§  
Grant stock options and other discretionary awards under the Company's stock option or other equity incentive plans to all other eligible individuals in the Company's service. Any grants of stock options to directors or officers shall be subject to the Committee's approval and shall be made in compliance with relevant SEC rules and regulations and Nasdaq rules and regulations (unless the Company's shares are hereafter traded on an exchange other than Nasdaq, in which case the Nasdaq rules and regulations shall not apply). The Committee may delegate to one or more corporate officers designated by the Committee the authority to make grants to eligible individuals (other than any such corporate officer) who are not officers, provided that the Committee shall have fixed the price (or a formula for determining the price) and the vesting schedule for such grants, approved the form of documentation evidencing such grants, and determined the appropriate number of shares or the basis for determining such number of shares by position, compensation level or category of personnel. Any corporate officer(s) to whom such authority is delegated shall regularly report to the Committee the grants so made. Any such delegation may be revoked at any time by the Committee.

§  
Amend the provisions of the Company's stock option or other equity incentive plans, to the extent authorized by the Board, and make recommendations to the Board with respect to incentive compensation and equity-based plans.

§  
Approve for submission to the shareholders stock option or other equity incentive plans or amendments thereto.

§  
Oversee and periodically review the operation of all of the Company's employee benefit plans, including but not limited to the Company’s qualified and non-qualified option plans. Responsibility for day-to-day administration of such plans, including the preparation and filing of all government reports and the preparation and delivery of all required employee materials and communications, need not be performed by the Committee directly and may be performed by Company personnel instead.

§  
Ensure that the Company's annual incentive compensation plan is administered in a manner consistent with the Company's compensation strategy and the terms of such plan, including but not limited to the following: participation, target annual incentive awards, corporate financial goals, actual awards paid to officers of the Company, total funds reserved for payment under the plan, and potential qualification under IRS Code Section 162(m), including the certification that any performance goals were satisfied.

 
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§  
Review matters related to management performance, compensation and succession planning (including periodic review and approval of Chief Executive Officer and other officer succession planning) and executive development for executive staff.

§  
Approve senior executive separation packages and senior executive severance benefits whether such packages or benefits are within or outside of the ordinary limits of the Company's incentive compensation plan.

§  
Have full access to the Company's executives and personnel as necessary to carry out its responsibilities.

§  
Obtain such data or other resources as it deems necessary to perform its duties, including but not limited to obtaining external consultant reports or published salary surveys, and engaging independent compensation consultants and other professionals to assist in the design, formulation, analysis and implementation of compensation programs for the Company's officers and other key employees.

§  
Have responsibility for the review and approval of all reports and summaries of compensation policies and decisions as may be appropriate for operational purposes or as may be required under applicable law.

§  
Perform any other activities consistent with this Charter, the Company's By-Laws and relevant law as the Committee or the Board deems necessary or appropriate.

§  
Review the Committee's Charter from time to time and recommend any changes thereto to the Board.

§  
Report to the Board on the major items covered at each Committee meeting.

Notwithstanding the foregoing, any action of the Committee may be subject to Board review and may be revised, modified or rescinded by the Board.

Committee Meetings

The Committee will meet at least on an annual basis, or more frequently as is may deem advisable or necessary to carry out its responsibilities. Meetings may be called by the Chairman of the Committee and/or by the management of the Company. Minutes of each meeting will be kept and duly filed together with the records of the meetings of the Board. Reports of meetings of the Committee will be made to the Board at the Board's next regularly scheduled meeting following the Committee meeting, accompanied by any recommendations to the Board approved by the Committee. The Chief Executive Officer of the Company may not be present during voting or deliberations by the Committee.

The Committee will also meet as and when necessary to act upon any other matters within its jurisdiction under this Charter. A majority of the total number of members of the Committee shall constitute a quorum at all Committee meetings, and the actions, recommendations and findings approved by a majority of the members of the Committee shall be binding upon the Committee.

 
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Compliance with Rules of SEC and the Company’s Exchange  

The Committee shall comply with the relevant rules and regulations of the SEC, the Nasdaq Marketplace Rules (until such time as the Company's securities are listed on an exchange other than Nasdaq), the New York Stock Exchange or any other national securities exchange to which the Company is, or may become, subject.

Adopted September 8, 2009
 
 
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CORPORATE GOVERNANCE AND NOMINATING COMMITTEE CHARTER

Purpose

The purpose of the Corporate Governance and Nominating Committee (the "Committee") of Zagg Incorporated (the "Company") is to (1) identify qualified individuals to become members of the Company's Board of Directors (the "Board"), (2) select the director nominees to be presented for election at each annual meeting of shareholders, (3) regularly develop, review and recommend to the Board a set of corporate governance policies applicable to the Company, and (4) provide oversight for the evaluation of the performance of the Board.

Committee Membership and Organization

The Committee shall be compose of two or more directors, each of whom shall meet the independence requirements of Rules 5605(a)(2) of The Nasdaq Stock Market, LLC Rules (the "Nasdaq Rules"). The Committee members shall be appointed by the Board and may be removed by the Board in its discretion in accordance with the Company's By-Laws, as in effect at such time. The Chairman of the Committee shall be designated by the Board. The Board shall affirmatively determine at all times required under the Nasdaq Rules that the members of the Committee are independent. As more fully set forth in the Nasdaq Rules, independent directors must not have any current or past relationships with the Company which would interfere with their exercise of independent judgment and must not otherwise fail to meet the independence standards set forth in the Nasdaq Rules.

Committee Meetings

The Committee shall meet as often as its members deem necessary to perform the Committee's responsibilities. The Committee may also act by unanimous written consent as the Committee may decide. Committee meetings will be governed by the quorum and other procedures generally applicable to meetings of the Board under the Company's By-Laws (the "By-Laws"), unless otherwise stated in the By-Laws or in a resolution of the Board or the Committee. The Committee, as it may determine to be appropriate, may meet in separate executive sessions with other directors, the Chairman of the Board, the Chief Executive Officer and other Company employees, agents or representatives invited by the Committee.

Committee Responsibility and Authority

The Committee shall have the following authority and responsibilities:

(a) Nominations and Qualifications of Directors

          (1) Prior to each annual meeting of shareholders, following determination by the Board of the number of directors to be elected at such meeting, the Committee shall identify individuals qualified to stand for re-election or to become new members of the Board, consistent with any qualifications, expertise and characteristics which may have been approved by the Board or determined by the Committee from time to time; the Committee shall evaluate incumbent directors whose terms are expiring at the meeting and consider their qualifications to stand for re-election; and the Committee shall evaluate nominees for election to the Board submitted by shareholders in accordance with procedures adopted by the Committee, the By-Laws of the Company, and applicable law.

 
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          (2) In the event of a vacancy on the Board, following determination by the Board that such vacancy shall be filled, the Committee shall identify individuals qualified to fill such vacancy, consistent with any qualifications, expertise and characteristics which may have been approved by the Board or determined by the Committee from time to time.

          (3) Before selecting any nominee for director, the Committee shall review the candidate's availability and willingness to serve. In light of its responsibility outlined above, the Committee shall seek candidates with the following minimum qualifications:

§  
a candidate must demonstrate integrity, accountability, informed judgment, financial literacy, creativity and vision;

§  
a candidate must be prepared to represent the best interests of all of the Company's shareholders, not just those of one particular constituency;

§  
a candidate must have a record of professional accomplishment in his or her chosen field; and

§  
a candidate must be prepared and able to participate fully in Board activities, including membership on Board committees.

In addition to the above guiding qualifications, the Committee's decisions regarding Board nominations shall be based upon the belief that it is important to have directors from various backgrounds and professions in order to ensure that the Board has a wealth of experiences to inform its decisions. Consistent with this philosophy, in addition to the minimum standards set forth above, business and managerial experience and an understanding of financial statements are very important.

The Committee shall have the authority, to the extent it deems necessary or appropriate, to retain any search firm to assist in identifying and evaluating director candidates and to retain independent legal counsel and any other advisors. The Company shall provide adequate funding, as determined by the Committee, for payment of compensation for any advisors retained by the Committee.

(b) Committees and Appointments

If and when requested periodically by the Board, the Committee shall identify and recommend to the Board the appointees to be selected by the Board for service on the Audit, Compensation and Stock Option, Corporate Governance and Nominating and other key committees of the Board. The Committee shall recommend to the Board changes as appropriate, whether in the creation of additional committees or elimination of existing committees.

(c) Board Size

The Committee shall periodically review the size of the Board and recommend to the Board any adjustments in size as deemed appropriate.

(d) Governance Policies

The Committee shall regularly assess and evaluate the corporate governance principles to be recommended to the Board and which are appropriate for the Company in light of the Nasdaq Marketplace Rules, the rules and requirements under the Securities Exchange Act of 1934, as amended and the nature of the Company's business, including principles to be incorporated into the Company's Code of Ethics. The Committee shall advise the Board as to the means to be employed in implementing such principles.

 
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Reports

The Committee shall make regular reports to the Board and shall propose any necessary action to the Board.

Annual Charter Review and Performance Review

The Committee shall review and reassess the adequacy of this charter on an annual basis and recommend any proposed changes to the Board. The Committee shall evaluate the Committee's own performance on an annual basis and provide a report regarding such evaluation to the Board.

Adopted September 8, 2009
 
 
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Ed Ekstrom Joins Board at Zagg Inc.
 
 
SALT LAKE CITY, Sep 09, 2009 (BUSINESS WIRE) -- ZAGG Inc. (OTCBB: ZAGG), a publicly traded leader in mobile electronics and accessories including the award-winning invisibleSHIELD(TM) and ZAGGaudio(TM) brands, announces the appointment of Ed Ekstrom to its Board of Directors. Mr. Ekstrom brings extensive board and executive experience in the technology sector to ZAGG.
 
 
Mr. Ekstrom is a technology pioneer and a founding Partner at vSpringCapital. Before joining vSpringCapital in 2001, he served as Vice President of the Intel Communications Products Group and General Manager of the Intel Utah Software Development Center, a post given to him after Intel acquired LANSystems in 1991, where he was a Vice President and General Manager of the Software Business Unit. Prior to LANSystems, Mr. Ekstrom was a founder of CeriSyn, and served as COO/CFO. He was also a founder of Cericor, which was acquired by Hewlett-Packard in 1985. Mr. Ekstrom continued working as an executive with HP in Boston for four years. Mr. Ekstrom serves on the boards of BDNA, Celio Corporation, Penguin Computing and Sparxent. He is currently Chairman of the Technology Advisory Board for the State of Utah, and is also a former chairman of the Utah Technology Council.
 
 
"Ed Ekstrom is a very capable and proven business leader and board member, and we are lucky to have him join us. His experience as an executive with top-level companies like Intel and HP will prove to be beneficial as ZAGG moves to the NASDAQ," said Robert G. Pedersen II, President and CEO of ZAGG. "I have seen Ed work on very large deals, and I know that his keen business acumen and extensive contacts will open doors and help drive ZAGG's continued growth."
 
 
"I am joining ZAGG when Robert has already assembled a dynamic board, a world-class executive team, and a dedicated and talented group of middle managers and individual contributors," said Mr. Ekstrom. "The ZAGG team has demonstrated through results their skill and commitment at building a highly successful globally relevant company. I'm thrilled to be associated with ZAGG and look forward to actively participating in ZAGG's bright future."
 
 
New ZAGG Board of Directors member Ed Ekstrom, at a glance:
 
 
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Joined vSpringCapital as a founding Partner in 2001
 
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A technology pioneer, Mr. Ekstrom is currently Chairman of the Technology Advisory Board for the State of Utah, and is also a former chairman of the Utah Technology Council
 
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Vice President over the Intel Communications Products Group, managing over a billion dollars, and General Manager of the Intel Utah Software Development Center from 1991-2001
 
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Vice President and General Manager of the Software Business Unit at LANSystems prior to its acquisition by Intel in 1991
 
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Founder and COO/CFO of CeriSyn
 
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Founder of Cericor prior to its acquisition by Hewlett-Packard, then worked as an executive at HP from 1985-1989
 
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Has served on multiple boards of both private and public companies
 
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Holds a BS in Computer Science from Brigham Young University and a MBA from Westminster College
 
 
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For more information on ZAGG's Board of Directors, please visit www.ZAGG.com/company/board_of_directors.php . For more information about ZAGG or any of its product lines, please visit www.ZAGG.com .
 
About ZAGG Inc.:
 
ZAGG Inc. designs, manufactures, and distributes protective clear coverings and accessories for consumer electronic and hand-held devices, worldwide under the brand names invisibleSHIELD(TM) and ZAGGaudio(TM). ZAGG has also introduced beta testing of AppSpace.com, an online destination for the fast-growing mobile app market, combined with the networking power of social media. The invisibleSHIELD is a protective, high-tech patented film covering, designed for iPods, laptops, cell phones, digital cameras, PDAs, watch faces, GPS systems, gaming devices, and other items. The patent-pending invisibleSHIELD application of clear protective film covering a device is the first scratch protection solution of its kind on the market, and has sold millions of units. Currently, ZAGG offers over 3,000 precision pre-cut designs with a lifetime replacement warranty through online channels, big box retailers like Best Buy, resellers, college bookstores, Mac stores and mall kiosks. The company continues to increase its product lines to offer additional electronic accessories and services to its tech-savvy customer base. For more product or investor information please visit the company's web site at www.ZAGG.com .
 
Safe Harbor Statement:
 
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may," "future," "plan" or "planned," "will" or "should," "expected," "anticipates," "draft," "eventually" or "projected." You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in filings made by the company with the Securities and Exchange Commission.
 
SOURCE: ZAGG Inc.
 
ZAGG Inc.
Media:
Nathan Nelson, 801-263-0699 ext. 107
nnelson@zagg.com
Investor Relations:
Brandon O'Brien, CFO, 801-263-0699, ext. 122
brandon@zagg.com
 
 
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