The Board of Directors, which is elected by the stockholders, is the ultimate decision-making body of the Company except with respect to those matters reserved to the stockholders. It selects the senior management team, which is charged with the conduct of the Company's business. Having selected the senior management team, the Board acts as an advisor and counselor to senior management and ultimately monitors its performance.
The directors are to exercise their business judgment to act in what they reasonably believe to be in the best interest of the Company and its stockholders.
Board members are expected to prepare for, attend and participate in all Board and applicable Committee meetings.
The Nominating and Corporate Governance Committee will review with the Board the requisite skills and characteristics for new Board members. This assessment will include members' qualifications as independent directors, as well as consideration of perceived needs of the Board, candidates' background, skills, business experience and expected contributions.
The Board believes that there should be a substantial majority of independent outside directors, and in no event will the Board consist of less than a majority of independent directors. A director will not be considered independent if he or she:
Members of the audit committee must meet additional independence requirements as follows:
For purposes hereof, "family members" shall mean a director's spouse, parents, children and siblings, whether by blood, marriage or adoption, or anyone residing in a director's home.
It is the responsibility of each director to ensure that other commitments do not conflict or materially interfere with the director's responsibilities to the Company. If a director has any concerns about whether serving as a director of another company might conflict with his or her duties to the Company, the director should consult the Chairman of the Board in advance of accepting an invitation to serve on the other company's board.
Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively, and should be committed to serve on the Board for an extended period of time. The Board does not believe that directors who retire or change from the position they held when they came on the Board should necessarily leave the Board. There should, however, be an opportunity for the Board, via the Nominating and Corporate Governance Committee, to review the continued appropriateness of Board membership under these circumstances.
Directors should offer their resignation in the event of any significant change in their personal circumstances, including a change in their principal job responsibilities. The Nominating and Corporate Governance Committee may determine that the director should continue based on the director's continuing expected contributions, business experience, availability, skills and background.
The Board currently has seven (7) members. The Board will periodically review the appropriate size of the Board.
The Corporation's Bylaws provide that the directors shall annually elect a Chairman from among the directors.
The Board believes that the offices of Chairman and CEO should generally be vested in two different people, and the Chairman should generally be a non-employee, independent director elected from among the non-employee directors. The Board recognizes, however, that the needs of the Company and the individuals available to fill these roles may dictate different solutions at different times, and the Board believes that retaining flexibility in these decisions is in the best interest of the Corporation. In the event that the offices of the Chairman and the CEO are vested in the same person, the Board will appoint a non-employee, independent director to serve as Lead Director, whose duties will include assisting the Board in ensuring compliance with the Corporation's corporate governance guidelines, serving as the presiding director for executive sessions of the independent directors and acting as liaison to the Chairman from the independent directors.
The Board does not believe that a fixed retirement age for directors is appropriate.
The Board does not believe it should establish term limits.
The Nominating and Corporate Governance Committee will review annually the results of the evaluation of the Board and its committees, and the perceived needs of the Board for various skills, business experience, expected contributions and background in determining the director candidates to be nominated at the annual meeting. The Nominating and Corporate Governance Committee will evaluate candidates for directors proposed by directors, stockholders or management in light of the Committee's views of the current perceived needs of the Board for certain skills, business experience and background, as well as the Committee's assessment of the candidate's qualification as an independent director, background, skills, business experience, and expected contributions. If the Nominating Committee believes that the Board requires additional candidates for nomination, the Committee may engage, as appropriate, a third party search firm to assist in identifying qualified candidates. All directors and nominees will submit a completed or, if previously submitted, an updated form of directors' and officers' questionnaire as part of the nominating process. The process may also include interviews and additional background and reference checks for non-incumbent nominees, at the discretion of the Nominating and Corporate Governance Committee. The Committee will consider stockholder nominations for directors in accordance with the Company's bylaws and otherwise consistent with these procedures.
Stockholders may communicate with any and all company directors by transmitting correspondence by mail addressed as follows:
Chairman of the Board
or Board of Directors
or [individual director]
c/o Corporate Secretary
901 Mariners Island Boulevard
San Mateo, CA 94404
The Corporate Secretary shall maintain a log of such communications and transmit as soon as practicable such communications to the identified director addressee(s), unless there are safety or security concerns that mitigate against further transmission of the communication, as determined by the Corporate Secretary. The Board of Directors or individual directors so addressed shall be advised of any communication not sent for safety or security reasons as soon as practicable. The Corporate Secretary shall relay all communications to directors absent safety or security issues.
The Company will make every effort to schedule its annual meeting of stockholders at a time and date to maximize attendance by directors taking into account the directors' schedules. It is desirable that directors attend the company's annual meeting of stockholders.
The independent directors of the Board will meet in executive session at least two times each year either before or after a regularly scheduled Board meeting and at any other reasonable time requested by any independent director. Executive sessions will be chaired by the Chairman of the Board, so long as the chair is an independent director, and otherwise by the Lead Director appointed by the Board, and such chairman will report the results to the CEO on relevant matters, or invite the CEO to join the executive session for further discussion, as appropriate.
Directors shall have access to the Company's personnel. Directors shall use their judgment to ensure that any contact with Company personnel is not disruptive to the Company's operations.
The Board encourages the Company's management to invite members of the Company's management to Board meetings in order to provide additional insight into matters discussed during the meeting and to expose to the Board key managers with future potential in the Company.
The Board and each committee of the Board shall have the authority to retain outside financial, legal or other advisors as they deem appropriate, and the Company shall provide funding for any such advisors selected by the Board or any committee.
The Board and each committee will perform an annual evaluation of itself. Each committee shall report to the Board upon its completion of its self-evaluation. The Board may conduct its own evaluation of committee performance.
On an annual basis, the Compensation Committee shall review the compensation for non-employee directors. The Compensation Committee shall be responsible for recommending to the full Board changes in the compensation for non-employee directors, and shall be guided by the following goals:
While the Board has not established the level of share ownership for individual directors, the Board believes that directors should be stockholders.
Management and the Nominating and Corporate Governance Committee shall arrange an orientation program for new directors. Incumbent directors shall also be invited to attend the orientation program. All directors will comply with any continuing education requirements developed by the NASDAQ.
The Board will at all times have an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. All members of these committees will be independent directors under the criteria established by NASDAQ. The Board may from time to time establish additional committees as necessary or appropriate. Committee members will be appointed by the Board. Consideration should be given to rotating committee members periodically, but rotation should not be mandated as a policy.
Each committee will have its own charter. The charters will set forth the purposes of the committees as well as qualifications for committee membership.
The Chairman of each committee will determine the frequency and length of committee meetings and will develop the committee's agenda for each meeting in conformity with the committee's charter.
It is the sense of the Board that consideration should be given to rotating committee members periodically, when desirable, but the Board does not feel that such a rotation should be mandated as a policy since there may be reasons to maintain an individual director's committee membership for a longer period.
The performance of the CEO will be reviewed by the Board at least annually. Such review will follow recommendations from the Compensation Committee with respect to long and short-term compensation goals and performance of the CEO.
The Board shall plan for the succession of the CEO. The Nominating and Corporate Governance Committee shall conduct a periodic review of the Company's succession planning, including selection and succession in the event of an emergency or the resignation or retirement of the CEO. The Committee shall report its findings to the Board.