The Board of Directors, which is elected by the shareholders, is the ultimate decision-making body of the Company except with respect to the matters reserved to shareholders. It selects the senior management team, which is charged with the conduct of the Company's business. The Board acts as an advisor to senior management and ultimately monitors management’s performance.
The number of members of the Board should be appropriate for efficient performance of the Board's duties and for effective consideration of issues relevant to the Company's business interests. The Governance and Compensation Committee shall periodically review the size of the Board and, if appropriate, make recommendations to the full Board regarding the number of members.
The Governance and Compensation Committee is responsible for recommending candidates to the full Board to either fill vacancies or stand for election at each annual meeting of shareholders. The Committee shall follow the Board of Directors Nomination Policy which is incorporated into the Governance and Compensation Committee Charter.
In accordance with the Company's By-laws, each director shall be elected annually by a majority of votes cast, except in the event of a contested election in which case each director shall be elected by a plurality of shares present. Any nominee who fails to receive a majority of votes cast in an uncontested election shall tender his or her resignation for consideration by the Governance and Compensation Committee, which will make a recommendation to the full Board as to whether to accept or reject the resignation. The resigning director shall not participate in the deliberations or the decision of the Committee or the Board.
It is the policy of the Company that the Board shall consist of a majority of independent directors. "Independence" is determined in accordance with the relevant NASDAQ listing requirements. It is the responsibility of the Board to annually determine, as to each independent director, that no circumstances exist which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
The Board shall select an independent director designated as the Lead Independent Director, who has responsibility for conducting executive session meetings of the non-management or independent directors and such other responsibilities as the independent directors may assign.
All Board members are expected to attend the Company's Annual Meeting of Shareholders unless exigent circumstances prevent attendance.
New directors are provided with an orientation program to familiarize them with the Company's business, strategic plans, finances, Code of Business Ethics and Conduct, and relevant policies. Further, board members are provided with internally developed materials regarding the Company, as well as access to outside educational opportunities regarding directors’ fiduciary duties and board responsibilities. Board members are expected to maintain the necessary level of expertise to effectively perform their duties as directors.
Directors should not serve on more than four other boards of public companies in addition to the Company's Board unless approved by the Governance and Compensation Committee. The CEO should not serve on more than two other boards of public companies unless approved by the Governance and Compensation Committee.
The Board does not endorse arbitrary term limits on directors' service, nor does it require mandatory retirement at a predetermined age. Rather, director qualifications are evaluated in accordance with the criteria set forth in the Board of Directors Nomination Policy.
The Board believes that non-management directors should hold a meaningful equity interest in the Company. The Board, therefore, expects that each director beneficially own, or acquire within five years after the later of first becoming a director or the initial adoption of these Guidelines, shares of common stock of the Company (including vested and unvested restricted stock) with a value of four times his or her annual Board retainer, excluding any committee retainer or fees. The Board recognizes that exceptions to this policy may be necessary or appropriate in individual circumstances.
In general, major decisions of the Company shall be considered by the Board as a whole. However, where appropriate for effective and efficient governance, the Board may delegate authority to its designated committees, which are currently as follows: Executive Committee; Audit Committee; Investment Committee; and Governance and Compensation Committee. Committees shall be appointed annually in accordance with independence and other regulatory requirements of the Securities and Exchange Commission and the NASDAQ Stock Market Rules. All Board Committees shall operate within the scope of their respective Charters or the authority delegated by the full Board.
