The following principles have been approved by the board of directors and, along with the charters of the board committees, provide the framework for the governance of CDT. The board recognizes that there is an on-going and energetic debate about corporate governance, and it will review these principles and other aspects of Cable Design Technologies governance annually or more often if deemed necessary.
1. Role of Board. CDT's business is conducted by its employees, managers and officers, under the direction of the chief executive officer (CEO) and the oversight of the board, to enhance the long-term value of the company for its shareholders.
2. Functions of Board. The board of directors has 4 scheduled meetings a year at which it reviews and discusses reports by management on the performance of the company, its plans and prospects, as well as immediate issues facing the company. In addition, the Board will hold special meetings when appropriate. Directors are expected to attend all scheduled board and committee meetings.
3. Qualifications. Directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of the shareholders. Directors should possess the following qualifications: (i) an inquiring and independent mind; (ii) practical wisdom and mature judgment; (iii) broad training and experience at the policy-making level in business, finance, accounting, law, government, education or technology; and (iv) expertise that is useful to CDT and complementary to the background and experience of other board members. Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively.
Any director who changes employment or has a substantial change in professional responsibilities will immediately bring such change to the attention of the chairman (or, if it involves the chairman, the chairman of the audit or compensation committee). If the new position or activity of the affected director is no longer compatible with the needs of CDT, the director shall offer his or her resignation from the board.
Directors will not be nominated for election to the board after their 72nd birthday, although the full board may nominate candidates over 72nd for special circumstances. The board does not believe that its members should be prohibited from serving on boards or committees of other organizations, and the board has not adopted any guidelines limiting such activities. However, the governance and nominating committee and the full board will take into account the nature of and time involved in a director's service on other boards in evaluating the suitability of individual directors for new or existing positions and making its recommendations to the shareholders.
4. Independence of Directors. A majority of the directors will be independent directors under the proposed or adopted (as applicable) New York Stock Exchange (NYSE) rules. The board has determined that 5 of CDT's current 7 directors are independent.
To be considered independent under the proposed NYSE rules, the board must determine that a director does not have any direct or indirect material relationship with CDT. The board has established the following guidelines to assist it in determining director independence:
6. Board Committees. The board has established the following committees to assist the board in discharging its responsibilities: (i) audit; (ii) compensation; and (iii) nominating and corporate governance. The current charters and key practices of these committees are published on the CDT website. The committee chairs report the highlights of their meetings to the full board following each meeting of the respective committees. The committees may occasionally hold meetings in conjunction with the full board.
7. Meetings of Non-Employee Directors. Non-Employee directors will meet periodically in executive session (without employee directors or management present). Such sessions shall be held at least quarterly in conjunction with the board's quarterly meeting. Executive sessions shall be called and chaired by the chairman of the board (so long as the chairman is not a management director).
8. Setting Board Agenda. The chairman of the board and CEO, in consultation with other members of the board, will set the agenda for each board meeting and will distribute the agenda in advance. Each director may add additional agenda items at, or in advance of, the meeting. Management will endeavor to distribute to the board, prior to the meeting, such information and data that is relevant to the board's understanding of matters to be discussed at an upcoming board meeting.
9. Succession Planning; Senior Management. The board shall review and approve a succession plan for the CEO, based upon recommendations from the compensation committee. In discharging the board's duties, directors may rely on the company's senior executives. Accordingly, the CEO and other members of senior management should possess high personal and professional ethics, integrity and values.
10. Director Self-Evaluation. The board and each committee will perform an annual self-evaluation.
11. Access to Independent Advisors and Management The board and its committees shall have the right at any time to retain independent outside financial, legal or other advisors. The board shall have unfettered access to CDT senior management and is encouraged to ask all questions and glean all information necessary to fulfill their duties.
12. Director Orientation. The general counsel and the chief financial officer shall be responsible for providing an orientation for new directors, and for periodically providing materials or briefing sessions for all directors on subjects that would assist them in discharging their duties. Each new director is encouraged to, within six months of election to the board, spend a day at corporate headquarters or one of the CDT's operating units for personal briefing by senior management on the company's strategic plans, its financial statements, and its key policies and practices.
13. Compensation of Board. The nominating and corporate governance committee shall have the responsibility for recommending to the board compensation and benefits for non-employee directors. In discharging this duty, the committee shall be guided by two goals: compensation should fairly pay directors for work required in a company of CDT's size and scope; and compensation should align directors' interests with the long-term interests of shareholders. Without Board discussion and approval, the company shall not make contributions to charities known to be associated with any Board member (other than de minimus contributions not exceed $2,500 in any 12-month period).