1.2 - Model Corporate Governance Guidelines

October 2003

The Board of Directors, which is elected by the shareholders, is the ultimate decision-making body of the Company except with respect to those matters reserved to the shareholders. It selects the senior management team, which is charged with the conduct of the Company’s business. Having selected the senior management team, the Board acts as an advisor and counselor to senior management and ultimately monitors its performance.

The fundamental role 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 fulfilling that responsibility the directors may reasonably rely on the honesty and integrity of the Company’s senior management and expert legal, accounting, financial and other advisors.

The Nominating and Corporate Governance Committee is responsible for reviewing with the Board from time to time the appropriate skills and characteristics required of Board members in the context of the current make-up of the Board. This assessment should include issues of diversity, age, skills such as understanding of manufacturing, technology, finance and marketing, and international background - all in the context of an assessment of the perceived needs of the Board at that point in time. [Directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of our stockholders. They must also have an inquisitive and objective perspective and mature judgment.] [We endeavor to have a Board representing diverse experience at policy-making levels in business, government, education and technology, and in areas that are relevant to the company’s global activities. Directors should have experience in positions with a high degree of responsibility, be leaders in the companies or institutions with which they are affiliated, and be selected based upon contributions they can make.] Board members are expected to rigorously prepare for, attend, and participate in all Board and applicable Committee meetings.

The Board believes that, as a matter of policy and consistent with applicable laws, rules and regulations, the Board should consist of a substantial majority of independent directors. In no event will the Board consist of less than a majority of independent directors.

In making a determination regarding a director’s independence, the Board shall consider all relevant facts and circumstances, including the director’s commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, and such other criteria as the Board may, in its discretion, determine relevant. A director will not be considered independent if he or she:

• is currently an employee of the Company;
• has been an employee of the Company within the past five years, provided that if a former employee is a director at the time of the adoption of these Guidelines, such former employment will not be deemed to cause such director not to be independent, so long as he or she has not been an employee of the Company within the past three years;
• has received within the past five years more than $100,000 during any twelve month period in direct compensation from the Company (other than fees for directors services), provided that if a person who is a director at the time of the adoption of these Guidelines, has received such compensation from the Company prior to the adoption of these Guidelines, the receipt of such compensation shall not be deemed to cause such director not to be independent, if he or she has not received such amount in any twelve month period in the past three years;
• has been affiliated with or employed by a present or former internal or external auditor of the Company during the past five years;
• has been employed as an executive officer of another company where any of the Company’s present executives serve on the other company’s compensation committee during the past five years;
• has been employed by another company (a) that accounts for at least 2% or $1 million, whichever is greater, of the Company’s consolidated gross annual revenues, or (b) for which the Company accounts for at least 2% or $1 million, whichever is greater, of the other company’s consolidated gross annual revenues during any of the past five years; or
• has any immediate family members (as defined by applicable NYSE rules) who would be covered under any of the above provisions during the past five years.

In addition to satisfying all of the independence criteria set forth above, no member of the Audit Committee may:

• receive any consulting, advisory or other compensatory fees from the Company or any of its subsidiaries (other than in his or her capacity as a member of the Audit Committee, the Board of Directors, or any other committee of the Board), or
• be an “affiliated person” of the Company or any of its subsidiaries (as defined by the Securities and Exchange Commission), except as a director of the Company.

Directors must be willing to devote sufficient time to carry out their duties and responsibilities effectively, and should be committed to serve on the Board for an extended period of time. Each Board member is expected to ensure that other existing and planned future commitments do not conflict with or materially interfere with the member’s service as a director. Directors are expected to avoid any action, position or interest that conflicts with an interest of the Company, or gives the appearance of a conflict.

Directors who also serve as CEOs or in equivalent positions should not serve on more than [two] boards of public companies in addition to the Board, and other directors should not serve on more than [four] other boards of public companies in addition to the Company’s board. [Current positions in excess of these limits may be maintained unless the Board determines that doing so would impair the director’s service on the Company’s board.]

Directors should offer their resignation in the event of any significant change in their personal circumstances, including a change in their principal job responsibilities.

The Board does not believe that a fixed retirement age for directors is appropriate.

The Board does not believe it should establish term limits. While term limits could help ensure that there are fresh ideas and viewpoints available to the Board, they hold 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 and, therefore, provide an increasing contribution to the Board as a whole.

[As an alternative to term limits, the [Nominating and Corporate Governance Committee], in conjunction with the Chief Executive Officer, will formally review each Director’s continuation on the Board every [five] years. This will also allow each Director the opportunity to conveniently confirm his/her desire to continue as a member of the Board.] The Board currently has [_______] members. The Board reviews from time to time the appropriate size of the Board. The Board will consider changing its size to accommodate outstanding candidates or to satisfy specific governance needs.

The Presiding Director shall be the Chairman of the Board, if present, or in his absence, [the Chair of the Nominating and Corporate Governance Committee] [or in such person’s absence, the independent director present who has the most seniority on the Board of Directors]. The Presiding Director shall be responsible to chair the Board’s executive sessions.

The Chairman of the Board shall receive, distribute to the Board and arrange responses to communications from stockholders and shall be identified as the recipient of such communications in the annual meeting proxy statement.

We do not believe that it is either necessary or desirable to establish a lead director. The Chairman of the Board, who presides at all meetings of the Board, takes the lead role in the boardroom. The Chairman of the various Board Committees takes the lead on matters falling within their purview that should not involve the Chief Executive Officer.
Separation of Chairman and CEO

The Board elects its Chairman and appoints the Company’s Chief Executive Officer according to its view of what is best for the Company at any given time. The Board does not believe there should be a fixed rule as to whether the offices of Chairman and CEO should be vested in the same person or two different people, or whether the Chairman should be an employee of the Company or should be elected from among the non-employee directors. The needs of the Company and the individuals available to play these roles may dictate different outcomes at different times, and the Board believes that retaining flexibility in these decisions is in the best interest of the Corporation.

The independent directors of the Board will meet in Executive Session [two] [times each year] [after] [before] [each regularly scheduled Board meeting] [and at any other time requested by any independent director].

The independent members of the Board shall have access to, and are encouraged to contact, Company employees in order to obtain the information necessary to fulfill their duties. The Board may establish a process for such inquiries. Management is encouraged to invite Company employees to Board meetings where it will provide the Board with additional insight into the matters being considered. The Board and each committee of the Board shall have the authority to retain outside financial, legal or other advisors as they deem appropriate, and shall have the authority to obtain advice, reports or opinions from internal and external counsel and advisors, without consulting with or obtaining approval from any officer of the Company.

The Board and each committee will perform an annual self-evaluation. Each [December] the directors will be requested to provide their assessments of the effectiveness of the Board andthe committees on which they serve to the Nominating and Corporate Governance Committee. [The self evaluation shall be based, in part, on an assessment questionnaire issued by the Nominating and Corporate Governance Committee.] The individual assessments will be organized and summarized by [the Committee] [an independent consultant] and reported for discussion to the full Board and the committees in [month]. The Nominating and Corporate Governance Committee should also report its assessment of the Board’s compliance with these principles set forth in these guidelines as well as identification of areas in which the Board or committees could improve performance.

On an annual basis, the [Nominating and Corporate Governance Committee/Compensation Committee] shall review the compensation for non-employee directors. The [Nominating and Corporate Governance Committee/Compensation Committee] shall be responsible for recommending to the full Board changes in the compensation for non-employee directors, and shall be guided by the following goals:

• directors should be fairly compensated for the work required in discharge of their duties;
• compensation should align the directors’ interests with the long-term interests of stockholders; and
• the compensation policy should be easy for stockholders to understand.
  [The Committee believes these goals are best served by providing [40%] of non-employee director compensation in cash the [60%] in deferred stock units.]
  Stock Ownership/Guidelines
  [While the Board does not shall not establish the level of share ownership for individual directors, the board believes that directors should be stockholders in order to align their interests with the long-term interests of the Company’s stockholders.]
  Alternative:
  [In order to align the interests of the Company’s directors with the Company’s stockholders, the Board believes that directors should have a significant financial stake in the Company. Accordingly, the Board believes that each director who has served on the Board for [3] years should own not less than [1,000] shares of the Company’s common stock. [At its discretion, the Board may evaluate whether this requirement should be waived in the case of any director, who, because of his or her personal circumstances, would incur a hardship by complying with this requirement.]

The Nominating and Corporate Governance Committee shall develop and maintain an orientation program for new directors that shall include meetings with senior management and visits to the Company’s facilities. Incumbent directors shall also be invited to attend the orientation program. All directors will comply with any continuing education requirements developed by the NYSE.

The Board will at all times have an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. All members of these committees will be independent directors under the criteria established by the NYSE. The Board may from time to time establish additional committees as necessary or appropriate. Committee members will be appointed by the Board upon the recommendation of the Nominating and Corporate Governance Committee. Consideration should be given to rotating committee members periodically, but rotation should not be mandated as a policy.

Each committee will have its own charter. The charters will set forth the purposes of the committees as well as qualifications for committee membership. The charters shall be posted on the Company’s website.

The Chairman of each committee, in consultation with the committee members and senior management, will determine the frequency and length of the committee meetings consistent with any requirements set forth in the committee’s charter. The Chairman of each committee, in consultation with the appropriate members of the committee and management, will develop the committee’s agenda.

The Compensation Committee conducts a review at least annually of the performance of the CEO. The Compensation Committee shall establish the evaluation process and determine the specific criteria on which the performance of the CEO is evaluated.

Succession Planning
The [Nominating and Corporate Governance Committee] shall conduct a periodic review of the Company’s succession planning, including policies and principles for CEO selection and succession in the event of an emergency or the retirement of the CEO. The Committee shall report its recommendation to the Board. [The Nominating and Corporate Governance Committee shall evaluate and nominate potential successors to the Board as required by circumstances].

Provided By DLA Piper

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