OPERATION OF THE BOARD
I. Director Responsibilities
The basic responsibility of the Directors is to exercise their business judgment to act in what they reasonably believe to be 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.
In furtherance of its responsibilities, the Board of Directors will:
Review, evaluate and approve, on a regular basis, long-range plans for the Company.
1. Review, evaluate and approve the Company’s budget and forecasts.
2. Review, evaluate and approve major resource allocations and capital investments.
3. Review the financial and operating results of the Company.
4. Review, evaluate and approve the overall corporate organizations structure, the assignment of senior management responsibilities and plans for senior management development and succession.
5. Review, evaluate and approve compensation strategy as it relates for senior management of the Company.
6. Adopt, implement and monitor compliance with the Company’s Code of Ethics.
7. Review periodically the Company’s corporate objectives and policies relating to social responsibility.
II. Board and Committee Meetings
Regular Board meetings will be held approximately four to six times per year, and special meetings will be called as necessary. A schedule of locations of the regular meetings will be provided to the Directors well in advance. Directors are expected to attend Board meetings and meetings of the committees on which they serve. Directors should spend the time necessary and meet as frequently as necessary to properly discharge their responsibilities. Executive Session will generally be held in conjunction with each Board meeting and the Directors will be provided the time and place in advance. Executive Sessions are designed to provide the Directors an opportunity to discuss matters that do not require formal Board action. The Chairman, Chief Executive Officer or Committee Chairpersons may from time to time invite corporate officers, other employees and advisors to attend Board or committee meetings whenever deemed appropriate.
III. Agenda Items for Board and Committee Meeting
The Chairman will establish the agenda for each Board meeting. At the beginning of the year the Chairman will establish a schedule of agenda subjects to be discussed during the year (to the degree this can be foreseen). Each Director is free to suggest the inclusion of items on the agenda. Each Director is free to raise at any Board meeting subjects that are not on the agenda for that meeting. A detailed agenda and, to the extend feasible, supporting documents and proposed resolutions will be provided to the Directors approximately one week prior to each Board meeting. Directors should review these materials in advance of the meeting. Subject to any applicable notice requirements, Directors having items to suggest for inclusion on the agenda for future Board meetings should advise the Chairman well in advance of such meetings. 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 appropriate members of the committee and management, will develop the committee’s agenda. At the beginning of each year each committee will establish a schedule of agenda subjects to be discussed during the year (to the degree these can be foreseen). A detailed agenda and, to the extent feasible, supporting documents and proposed resolutions will be provided to the committee members approximately one week prior to each committee meeting. Committee members should review these materials in advance of the meeting.
IV. Director Compensation
Non-employee Directors shall receive reasonable compensation for their services as such Directors who are employees of the Company or any of its subsidiaries shall receive no additional compensation for serving as Directors. The form and amount of Director Compensation will be determined by the People and Nomination and Compensation Committee in accordance with the policies and principles set forth in its charter, and the People and the Nomination and Compensation Committee will conduct an annual review of Director Compensation. The People and Nomination and Compensation Committee will consider that Director’s 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.
V. Director Orientation and Education
Management will provide new Directors with an initial orientation in order to familiarize them with their responsibilities as Directors under law and the OTC BB listing standards, and with the Company and its strategic plans, its significant financial, accounting and risk management issues, its compliance programs, its Code of Ethics, its senior management, and its internal and independent auditors. In order to facilitate the Director’s fulfillment of their responsibilities regarding continuing education and to enhance each Director’s knowledge of the Company, the Company’s business operations and the latest developments in corporate governance, it is appropriate for management to provide Directors with the following:
1. Educational programs supplemental to the initial orientation to explain the Company’s business operations, including its technology, products and market position
2. Access to, or notice of, continuing educational programs that are designed to keep Directors abreast of the latest developments in corporate governance matters and critical issues relating to the operation of public company boards
3. Material that contains information pertaining to (i) the Company’s industry and (ii) comparisons of the Company with its major competitors
4. Periodic visits to operating units normally as part of regularly scheduled board meetings.
5. A legal review for the Board, at least annually of (i) the status of major litigation, (ii) compliance with significant regulatory requirements affecting the Company and (iii) corporate governance matters.
VI. CEO Evaluation and Management Succession
The Nomination and Compensation Committee will conduct an annual review of the Chief Executive Officer’s performance, as set forth in its charter. The Board of Directors will review the Nomination and Compensation Committee’s report in order to ensure that the Chief Executive Officer is providing the best leadership for the Company in the long and short-term.
The Nomination and Compensation Committee should make an annual report to the Board on succession planning. The entire Board will work with the Compensation committee to nominate and evaluate potential successors to the Chief Executive Officer. The Chief Executive Officer should at all times, make available his or her recommendations and evaluations of potential successors, along with a review of any development plans recommended from such individuals.
VII. Director Access to Officers and Employees
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 appropriate, copy the CEO on any written communications between a Director and an officer or employee of the Company.
VIII. Independent Advisors
The Board and each committee have the power to engage experts, consultants or advisors, including independent legal counsel, deemed appropriate by the Board or the committee, without consulting or obtaining approval of any officer of the Company. The Company will provide for appropriate funding, as determined by the Board or committee, for payment of compensation to any such counsel, experts, consultants or advisors retained by the Board or a committee.