Corporate Governance - Other Board Practices


I. Review of Roles and Responsibilities of Directors

The Chairman of the Board will review with each Director on a periodic basis the performance of each Director’s duties as well as the role and responsibilities of each Director.

II. Limitation of Liability

To the extent permitted by Washington State General Corporation Law, a Director will not be liable to the Company or its shareholders. Washington law currently permits eliminating liability for monetary damages, provided that such provisions shall not eliminate or limit the liability of a director for acts or omissions that involve intentional misconduct by a director or a knowing violation of law by a director, for conduct violating RCW 23B.08.310.

III. Performance Evaluation of the Board

The Board of Directors will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. The Nomination and Compensation Committee will receive comments from all Directors and report annual to the Board with an assessment of the Board’s performance. The assessment 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 specifically focus on areas in which the Board or management believes that the Board could improve.

IV. Personal Characteristics

Integrity and Accountability: High ethical standards, integrity, and strength of character in his or her personal and professional dealings and a willingness to act on and he accountable for his or her decisions.

Informed Judgement: Demonstrates intelligence, wisdom and thoughtfulness in decision-making. Demonstrate a willingness to thoroughly discuss issues, ask questions, express reservations and voice dissent.

Financial Literacy: An ability to read and understand balance sheets, income, and cash flow statements. Understand financial ratios and other indices for evaluating Company performance.

Mature Confidence: Assertive, responsible and supportive in dealing with others. Respect for others, openness to others’ opinions and the willingness to listen.

High Standards: History of achievements that reflect high standards for himself or herself and others.

V. Core Competencies

Accounting and Finance: Experience in financial accounting and corporate finance, especially with respect to trends in debt and equity markets. Familiarity with internal financial controls.

Business Judgment: Record of making good business decisions and evidence that duties as a Director will be discharged in good faith an in a manner that is in the best interests of the Company.

Management: Experience in corporate management. Understand management trends in general and in the areas in which the Company conducts its business.

Crisis Response: Ability and time to perform during periods of both short-term and prolonged crisis.

Industry/Technology: Unique experience and skills in an area in which the Company conducts its business, including manufacturing and technology relevant to the Company.

International Markets: Experience in global markets, international issues, and foreign business practices.

Leadership: Understand and possess skills and have a history of motivating high-performing, talented managers.

Strategy and Vision: Skills and capacity to provide strategic insight and direction by encouraging innovations, conceptualizing key trends, evaluating strategic decisions, and challenging the Company to sharpen its vision.

VI. Commitment to the Company

Time and Effort: Willing to commit the time and energy necessary to satisfy the requirements of Board and Board Committee membership. Expected to attend and participate in all Board meetings and Board Committee meetings in which they are a member. A willingness to rigorously prepare prior to each meeting and actively participate in the meeting. Willingness to make himself or herself available to management upon request to provide advice and counsel.

Awareness and Ongoing Education: Possess, or be willing to develop, a broad knowledge of both critical issues affecting the Company (including industry, technology, and market-specific information), and director’s roles and responsibilities (including the general legal principles that guide board members).

Other Commitments: In light of other existing commitments, ability to perform adequately as a Director, including preparation for and attendance at Board meetings and a willingness to do so.

VII. Team and Company Considerations

Balancing the Board: Contributes talent, skills, and experience that the Board needs as a team to supplement existing resources and provide talent for future needs.

Diversity: Contributes to the Board in a way that can enhance perspective and experiences through diversity in gender, ethnic background, geographic origin, and professional experience (public, private, and non-profit sectors). Nomination of a candidate should not be based solely on these factors.