EXHIBIT 99.1
BOARD OF DIRECTORS
CORPORATE GOVERNANCE PRINCIPLES
The following are the corporate governance principles and practices of
the Board of Directors.
I. STATEMENT ON CORPORATE GOVERNANCE
The corporate governance standards established by the Board provide a
structure within which directors and management can effectively pursue the
Company's objectives for the benefit of its stockholders. The Company's business
is managed under the direction of the Board of Directors, with the Board
delegating the conduct of business to the Chief Executive Officer and other
members of the management team. The principal functions of the Board are to:
. Select and evaluate the Chief Executive Officer.
. Establish the Company's strategic direction.
. Monitor the Company's performance.
. Approve management compensation plans and programs.
. Advise and counsel management.
. Review succession planning.
. Review the structure and operation of the Board.
. Promote stockholder value.
II. BOARD STRUCTURE
A. Board Size and Composition
The Company's Certificate of Incorporation provides for the annual
election of directors. The Board, on the recommendation of the Corporate
Governance Committee, will annually evaluate and determine the appropriate size
and composition of the Board.
B. Board Independence
1. Number of Independent Directors. The Board believes that as a
matter of policy at least two-thirds of the directors should be independent.
2. Definition of Independent Director. No director shall qualify as
"independent" unless the Board has affirmatively determined that the director
has no material relationship with the Company (either directly, or as a partner,
stockholder or officer of an
organization that has such a relationship with the Company). When making these
determinations, the Board should consider all relevant facts and circumstances,
and all such determinations made by the Board, along with the bases therefor,
shall be publicly disclosed in the Company's annual proxy statement. When
assessing the materiality of a director's relationship with the Company, the
Board should consider the issue not merely from the standpoint of the director,
but also from that of persons or organizations with which the director has an
affiliation. The following persons shall not, under any circumstances, be
determined by the Board to be independent:
a. A director who is a former employee of the Company and whose
employment with the Company ended less than 5 years prior to the date of the
determination.
b. A director who is, or in the past 5 years has been, affiliated
with or employed by a present or former (i.e., within the past five years)
auditor of the Company or of an affiliate of the Company.
c. A director who is, or in the past 5 years has been, part of an
interlocking directorate whereby an executive officer of the Company serves on
the compensation committee of another company that employs the director.
d. A director who has an immediate family member who falls into,
or in the past 5 years has fallen into, any of the preceding three categories.
In addition, for purposes of eligibility to serve on the Audit Committee, no
director shall qualify as "independent" unless director fees, including fees for
service on committees of the Board, are the only compensation paid to the
director by the Company. Disallowed compensation for a member of the Audit
Committee would include fees paid directly or indirectly for services as a
consultant or legal or financial advisor to the director or the director's firm.
3. Conflict of Interest. Directors will disclose any business
relationships with the Company or any other potential conflicts of interest as
they become aware of them, and will update annually their responses to the
Directors and Officers Questionnaire. Under the Board's conflict of interest
policy, directors may not enter into a transaction or other business dealings
with the Company without first disclosing the transaction and obtaining advance
approval by the Board. The director must recuse himself or herself from Board
consideration and decision on any such transaction.
4. Separation of Chairman and Chief Executive Officer. The bylaws of
the Company permit the roles of Chairman and Chief Executive Officer to be
performed by the same individual. As a matter of policy, the Board believes that
separation of these functions is not required, and whether to combine the roles,
or not, is solely a matter of the Board's discretion, considering the
circumstances and the individual or individuals in question.
C. Committee Structure
1. Number of Committees. There are three standing committees of the
Board: Audit, Compensation, and Corporate Governance. Additional standing
committees may
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be created, on the recommendation of the Corporate Governance Committee, by
resolution of the Board.
2. Independent Members. The Audit, Compensation and Corporate
Governance Committees are comprised solely of independent directors.
3. Assignment of Committee Members.
a. Composition of Committees. The Corporate Governance Committee
annually assesses the appropriate size and composition of the Board committees
and recommends to the Board any changes in committee assignments. Committee
assignments may be periodically changed to broaden the directors' knowledge of
the Company's business and to take fullest advantage of the breadth of
directors' expertise. While rotating committee assignments should be considered
periodically, committee rotation is not mandatory, since the Board believes
there are significant benefits attributable to continuity, experience gained in
service on particular committees, and utilizing most effectively the individual
talents of Board members.
b. Special requirement for Audit Committee. The Audit Committee
shall be composed of at least three members, all of whom are financially
literate, or become so within a reasonable period of the date of their
appointment to the committee. For purposes of this guideline, "financial
literacy" shall mean familiarity with the Company's financial statements,
including its balance sheet, income statement and cash flow statement, and
general knowledge of key business and financial risks and related controls or
control processes. Such knowledge may be acquired after appointment to the
committee through review of educational materials or other resources. In
addition, at least one member of the Audit Committee will have accounting or
related financial management expertise, which shall mean a solid background in
finance, accounting or auditing, acquired through past employment experience,
professional training, or any other comparable experience that results in the
individual's financial sophistication.
III. DIRECTOR SELECTION AND EVALUATION
A. Board Membership Criteria
Candidates nominated for election or reelection to the Board should
possess the following qualifications:
. Highest personal and professional ethics, integrity and values;
. An inquiring and independent mind;
. Practical wisdom and mature judgment;
. Broad training and experience at the policy making level in
business, government, education or technology;
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. Expertise that is useful to the Company and complementary to the
background and experience of other Board members, so that an
optimum balance of expertise among members on the Board can be
achieved and maintained;
. Willingness to devote the required amount of time to carrying out
the duties and responsibilities of Board membership;
. Commitment to serve on the Board over a period of years to
develop knowledge about the Company's operations; and
. Involvement only in activities or interests that do not create a
conflict with the director's responsibilities to the Company and
its stockholders.
The Corporate Governance Committee determines the appropriate mix of
skills and characteristics required to best fill the needs of the Board at a
given point in time and periodically reviews and updates the criteria as deemed
necessary.
B. Procedure for Selecting Nominees
Each year the Corporate Governance Committee considers the needs of
the Board, reviews the performance of the board and recommends a slate of
director candidates to nominate for election at the annual meeting of
stockholders. The Corporate Governance Committee may consider candidates
proposed before the meeting by stockholders, but has the sole discretion to
recommend a slate of candidates for the Board's approval. Directors are elected
by stockholder vote at the annual meeting of stockholders. Between annual
meetings, the Board may elect directors to fill vacancies.
C. Criteria and Procedure for Evaluating Individual Director Performance
The Corporate Governance Committee oversees the process of evaluating
the performance of individual directors, Board committees and the Board as a
whole. Each committee conducts an annual self-assessment of its performance. The
Corporate Governance Committee reviews the self-assessments and reports its
findings and recommendations to the Board. The Corporate Governance Committee
conducts an annual assessment of the effectiveness of the full Board. The
Corporate Governance Committee evaluates periodically the performance of
individual directors.
D. Orientation and Continuing Education
It shall be the responsibility of the Corporate Governance Committee
to ensure an orientation and continuing education for all directors.
E. Limits on Other Board Memberships
The Corporate Governance Committee considers whether a
potential candidate for director has the time available, in light of other
business and personal commitments, to perform the responsibilities required for
effective service on the Board. After election to the
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Board, it is expected that a director will notify the Chairman of the Corporate
Governance Committee prior to joining another corporate board and will discuss
with the Chairman any potential conflict of interest that may arise. Among the
criteria used in evaluating director performance is whether the director is
prepared for meetings and spends the time required for effective service to the
Board. In light of this, the Board does not believe that it is necessary to
establish any limit on the number of other boards on which a director may serve.
IV. BOARD OPERATIONS
A. Director Compensation
The Corporate Governance Committee considers and recommends to the
Board the appropriate structure and amount of director compensation. Employee
directors receive no compensation, other than their normal salary, for serving
on the Board or its committees.
B. Stock Ownership
To enhance the alignment of interests of Directors with interests of
stockholders, the Board encourages Directors to own common shares of the
Company.
C. Meetings
The Corporate Governance Committee considers and makes recommendations
on the number of regular meetings of the Board. Directors are expected to attend
regularly Board meetings and meetings held each year by committees on which the
directors sit. In addition to the foregoing, the non-management directors of the
Company shall meet at regularly scheduled executive sessions without management,
to be presided over by the Chair of the Corporate Governance Committee.
D. Agendas and Advance Distribution of Meeting Materials
The Chairman typically establishes the agenda for each Board meeting
and arranges for distribution of copies of the preliminary agenda sufficiently
in advance of the meeting to assure directors are apprised of the principal
matters to be considered. Each director is free to suggest additional items for
the agenda and to raise at any regular meeting subjects for discussion that are
not on the agenda.
Information and data that are important to the Board's understanding
of the business and of matters to be considered at the meeting are distributed
for review at least three business days prior to the meeting, unless
circumstances require a later distribution. Sensitive matters may be discussed
at the meeting without the prior distribution of written materials. For
convenience, the agenda and materials may be distributed again at the meeting
along with any materials which could not be sent in advance.
E. Board Access to Senior Management
Board members may, in their discretion, have access to management.
Board members are generally expected to coordinate direct contact with
management through the Chief
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Executive Officer. At the invitation of the Board, senior management may attend
and make presentations at meetings of the full Board, and at such committee
meetings as the chairs of the committees request.
F. Information About Developments
The Chief Executive Officer keeps the Board apprised of new
developments between regular meetings of the Board.
G. Corporate Spokesperson
The Board believes that executive management should speak for the
Company. Individual directors may, from time to time, meet or otherwise
communicate with various constituencies that are involved with the Company, but
it is expected that Board members would do this with knowledge of management,
and in most cases, at the request of management. Board members shall refer any
requests for public comment to the Chief Executive Officer.
V. COMMITTEE OPERATIONS
A. Committee Charters
All standing committees have charters outlining their duties and
responsibilities which have been approved by the Board. The committees review
the charters on an annual basis and recommend to the Board any necessary
revisions.
B. Committee Meetings and Agenda
The schedule of regular meetings of each committee, and a forward
agenda of regularly recurring items to be considered by the committee, are
established on an annual basis when the calendar for Board meetings is
developed. The chair of each committee, in consultation with appropriate members
of management, has the authority to place additional items on the agenda, and to
schedule ad hoc or special meetings of the committee, subject to the
requirements of notice and quorum.
C. Committee Reports
Each committee chair reports to the full Board, at the next meeting of
the Board following the committee meeting, with respect to matters considered
and actions taken by the committee.
D. Committee Attendance by Chairman and Chief Executive Officer
The Chairman and the Chief Executive Officer may attend the meeting of
any committee, even if they are not members of the committee, except when (1)
the Committee is meeting in executive session and (2) the non-management
directors are meeting as described in Section IV.C above.
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VI. MANAGEMENT OVERSIGHT
A. Executive Compensation
The Compensation Committee is responsible for administering executive
compensation programs, policies and practices. The Compensation Committee may
use the services of an outside consultant to assist it in evaluating executive
compensation levels compared to peers in general industry. The Compensation
Committee shall set the compensation of the Chief Executive Officer and shall
approve the compensation of senior executives upon the recommendation of the
Chief Executive Officer.
B. Executive Stock Ownership
To enhance the alignment of interests of executives with interests of
stockholders, the board encourages executives to own common shares of the
company.
C. Chief Executive Officer Evaluation
The Chief Executive Officer shall submit an annual self-assessment of
his performance to the Chairman of the Compensation Committee for submission to
the full Board. The Compensation Committee coordinates the Board's role in
establishing performance criteria for the Chief Executive Officer and evaluates
the Chief Executive Officer's performance annually.
D. Succession Planning
The Compensation Committee shall have the responsibility of assessing
succession planning for management and leadership of the Company.
VII. DISCLOSURE OF PRINCIPLES AND COMMITTEE CHARTERS
These Corporate Governance Principles, and the charters of each of the
Board's standing committees, shall be published on the Company's website and
made available in print to any stockholder upon request. The Company's annual
report shall contain a statement to the effect of the foregoing sentence.
VIII. ANNUAL SELF-EVALUATION
The Board shall conduct annually a self-evaluation to determine
whether it and its committees are functioning effectively.
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