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Director Qualifications
A majority of the members of
the Board of Directors must meet
the criteria for independence
required by the NASDAQ Stock
Market and the Securities and
Exchange Commission. The Board
is responsible for reviewing,
on an annual basis, the requisite
skills and characteristics required
for new Board members as well
as the composition of the Board
as a whole. This assessment will
include a review of (1) members’
qualification as independent,
as well as consideration of a
potential candidate’s experience,
areas of expertise and other
factors relative to the overall
composition of the Board and
(2) the continued appropriateness
of Board membership due to a
change in the responsibility
individual directors held when
they were elected to the Board
or for other reasons. Nominees
for directors will be selected
by independent members of the
Board.
It is the sense of the Board
that its size is appropriate
at this time. However, the Board
would be willing to increase
its membership to a limited extent
in order to accommodate the availability
of an outstanding candidate.
Directors should advise the Chairman
of the Board in advance of accepting
an invitation to serve on another
public company board.
The Board does not believe it
should establish term limits.
While term limits might assure
that there are fresh ideas and
viewpoints available to the Board,
term limits involve the disadvantage
of losing the contribution of
directors who have been able
to develop, over a period of
time, increasing insight into
the Company and its operations.
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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 this 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 will also be
entitled to be covered by reasonable directors’
and officers’ liability insurance purchased
by the Company on their behalf; to the benefits of
indemnification to the fullest extent permitted by
law and by the Company’s articles of incorporation,
bylaws, and any indemnification agreements; and to
exculpation as provided by state law and the Company’s
articles of incorporation.
Directors are expected to attend Board meetings and
meetings of Board committees on which they serve,
to spend the time needed to discharge their Board
duties in a reasonable manner, and to meet as frequently
as necessary to properly discharge their responsibilities.
Information and data that are important to the Board’s
understanding of the business to be conducted at a
Board or committee meeting should generally be distributed
in writing to the directors before the meeting, and
directors should review these materials in advance
of the meeting.
The Board has no policy with respect to the separation
of the offices of Chairman and the Chief Executive
Officer. 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 when it elects a chief executive
officer.
The Chairman should establish the agenda for each
Board meeting. Each Board member may suggest the inclusion
of items on the agenda. Each Board member also may
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, five-year
financial plans, annual budgets and other principal
issues that the Company will face in the future during
at least one Board meeting each year.
Independent directors shall meet in regularly convened
executive sessions without management directors or
management participation. The Company shall also disclose
the procedure by which interested parties may communicate
directly and confidentially with the presiding director
or independent directors as a group.
The Board believes that the management speaks for
the Company. Individual Board members, from time to
time, may meet or otherwise communicate with various
constituencies that are involved with the Company.
It is expected, however, that Board members would
do this with the knowledge of the management and,
absent unusual circumstances or as contemplated by
the committee charters, only at the request of management.
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Board Committees
The Board at all times will have
an Audit Committee and a Compensation
Committee. All of the members
of these committees will be independent
directors under the criteria
established by the NASDAQ Stock
Market and under the Securities
and Exchange Commission. Committee
members will be appointed by
the Board with consideration
of the desires of individual
directors. It is the sense of
the Board that consideration
should be given to rotating committee
members periodically, but the
Board does not believe that rotation
should be mandated as a policy.
Each committee will have its
own charter. The charter for
each committee will set forth
the purposes and responsibilities
of the committee as well as qualifications
for committee membership, procedures
for committee member appointment
and removal, committee structure
and operations and committee
reporting to the Board.
The Chairperson 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 Chairperson of each
committee, in consultation with
the members of the committee
and management, will develop
the committee’s agenda.
The schedule for each committee
will be furnished to all directors.
The Board and each committee
have the power to hire independent
legal, financial, or other advisors
as they may deem necessary, without
consulting with or obtaining
the approval of any officer of
the Company in advance.
The Board, from time to time,
may establish or maintain additional
committees as necessary or appropriate.
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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 may be arranged through
the CEO or the Secretary or directly
by the director. 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 CEO on any written communications
between a director and an officer
or employee of the Company.
The Board, as appropriate in
its judgment, will invite senior
officers of the Company to attend
Board meetings. If the CEO wishes
to have Company personnel attend
meetings on a regular basis or
periodic basis, this suggestion
should be brought to the Board
for approval.
The main responsibility for providing
assistance to the Board rests
with the Company. The Board and
its committees may seek legal
or other expert advice from a
source independent of management
and shall be provided with resources
for such purposes. Generally,
this would be with the knowledge
of the CEO, but this is not a
condition to retaining such advisors.
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Director Compensation
The form and amount of director
compensation will be determined
by the Compensation Committee
in accordance with the policies
and principles set forth in its
charter, and the Compensation
Committee will conduct an annual
review of director compensation.
The Compensation Committee will
consider that directors’
independence may be jeopardized
if director compensation and
perquisites exceed customary
levels, if the Company makes
substantial charitable contributions
to organizations with which a
director is affiliated, or if
the Company enters into consulting
contracts with (or provides other
indirect forms of compensation
to) a director or an organization
with which the director is affiliated.
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Director Orientation and Continuing
Education
At such time as a director joins
the Board, the Board and the
CEO will provide appropriate
orientation for the director,
including arrangement of meetings
with management. The Board considers
it desirable that directors participate
in continuing education opportunities
and will reimburse directors
for reasonable expenses as appropriate.
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CEO Evaluation and Management
Succession
The Compensation Committee will
conduct an annual review of the
CEO’s performance, as set
forth in its charter. The Board
of Directors will review the
Compensation Committee’s
report in order to ensure that
the CEO is providing the best
leadership for the Company in
the long- and short-term.
As appropriate, the entire Board
will work to nominate and evaluate
potential successors to the CEO.
The CEO 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.
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Code of Business Conduct and
Ethics and Whistleblower Policy
The Company has a Code of Business
Conduct and Ethics. The rules
set forth in the Code are applicable
to all employees and directors.
The Code addresses several areas,
including compliance with law,
conflicts of interest, confidentiality
of information, protection and
proper use of company assets
and the reporting of any illegal
or unethical behavior (which
is also addressed by the Company’s
Whistleblower Policy). Each director
is expected to be familiar with
and follow the Code and its Whistleblower
Policy.
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Annual Performance Evaluation
The Board of Directors will conduct
an annual self-evaluation to
determine whether it and its
committees are functioning effectively.
The results of the self-evaluation
will be discussed with the full
Board following the end of each
fiscal year. The assessment will
focus on the Board’s contribution
to the Company and on areas in
which the Board or management
believes that the Board could
improve.
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Disclosure of Guidelines
These Guidelines will
be made available in accordance with applicable rules
and regulations.
Adopted by Resolution of the Board of Directors
March 5, 2004
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