The Board of Directors of Applera Corporation has adopted the following guidelines to reflect the principles by which the Company operates. The Board will review these guidelines from time to time and make such changes as it deems necessary or advisable.
1. Role of the Board.
The Company's business is managed under the direction of the Board of Directors. The Board selects the Chief Executive Officer and other members of senior management who are charged with the day-to-day conduct of the Company's business. The Board's role is to oversee the management and governance of the Company, monitor senior management's performance, and address strategic issues affecting the Company.
2. Size of Board.
The Company's Certificate of Incorporation permits the Board to vary the size of the Board from 3 to 13 directors. The Board believes that, given the nature and scope of the Company's business, the size of the Board should be approximately 10 directors.
3. Term Limits/Retirement Age.
Directors are elected each year at the annual meeting of stockholders. The Board does not believe that it is advisable to establish term limits for directors because such limits could deprive the Company and its stockholders of the contribution of directors who have been able to develop valuable insights into the Company and its operations over time. However, the Board has established a retirement policy which provides that directors may not stand for election after age 72 or continue to serve beyond the next annual stockholders' meeting after reaching age 72.
4. Chairman of the Board and CEO.
The positions of Chairman of the Board and Chief Executive Officer will be held by the same person, except in unusual circumstances. The Board believes this combination has served the Company well over many years. The function of the Board in monitoring the performance of the senior management and governance of the Company is fulfilled by the presence of outside directors of stature who have substantive knowledge of the business.
5. Other Board Service.
The Board does not believe that its members should be prohibited from serving on the Boards of other companies so long as those commitments do not create material actual or potential conflicts and do not interfere with the director's ability to fulfill his or her duties as a member of the Board. The Nominating/Corporate Governance Committee will take into account the nature and time involved in the director's service on other boards, including committee responsibilities, in assessing director nominees and committee assignments.
6. Selection of Director Candidates.
The Nominating/Corporate Governance Committee will consider the nomination of existing directors for re-election, as well as director candidates to fill new positions created by expansion and vacancies that occur by resignation, retirement, or for any other reason. Existing directors will be considered for re-election, and new candidates will be selected, based on their independence, character, judgment, business experience, diversity, and specific areas of expertise, among other relevant considerations. Final approval of the nomination of an existing director for re-election or a new candidate will be determined by the full Board. All directors are elected each year by the stockholders at the annual meeting of stockholders. Between annual meetings, the Board may elect directors to serve until the next annual meeting. The Nominating/Corporate Governance Committee will consider director candidates recommended by Board members, Company management, stockholders, and other sources. The Nominating/Corporate Governance Committee will evaluate director candidates proposed by stockholders in the same manner it evaluates other candidates, provided that stockholders proposing a director candidate submit their proposal to the Company's Secretary prior to the deadlines generally applicable to the submission of stockholder proposals and in accordance with any other procedures that may be established by the Nominating/Corporate Governance Committee from time to time.
At least a majority of the Board will be comprised of directors who meet the criteria for independence required by the New York Stock Exchange and the Securities and Exchange Commission. It is the objective of the Board that all non-management directors be independent directors absent unusual and compelling circumstances. Only those directors who the Board affirmatively determines have no material relationship with the Company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company) and who meet the additional qualifications prescribed under the New York Stock Exchange rules will be considered independent. In addition, members of the Audit/Finance Committee will also satisfy the independence requirements for members of audit committees prescribed under the Sarbanes-Oxley Act. In making its determination, the Board will broadly consider all relevant facts and circumstances.
Relationships with charitable organizations will not be considered material relationships that would impair a director's independence unless contributions by the Company to the organization in any single fiscal year within the preceding three years exceeded the greater of $1 million or 2% of such organization's consolidated gross revenues. The Company's automatic matching of employee charitable contributions will not be included in the amount of the Company's contributions for this purpose.
1. Meetings of the Board.
The Board of Directors will have at least six regularly scheduled meetings each year. Additional unscheduled meetings may be called upon appropriate notice at any time to address specific needs of the business.
2. Executive Sessions of Non-Management Directors.
Non-management directors of the Company will meet regularly in executive session without the Chief Executive Officer or any other member of management present. The director then serving as chair of the Nominating/Corporate Governance Committee will serve as presiding director of these sessions.
3. Attendance at Meetings of Board of Directors and Stockholders.
Directors are expected to attend meetings of the Board and the committees on which they serve and also to attend the annual meeting of stockholders. Attendance in person is preferred, but attendance by teleconference is permitted if necessary.
4. Selection of Agenda Items for Board Meetings.
The agenda for each Board meeting will be established by the Chairman of the Board. Each director is free to suggest the inclusion of items on the agenda and is free to raise at any Board meeting subjects that are not on the agenda for that meeting.
5. Board Materials Distributed in Advance.
Materials that are important to a director's understanding of the business to be conducted at a Board or committee meeting will, to the extent practicable, be distributed to directors in advance of the meeting to allow directors adequate time to prepare for the meeting.
6. Committees of the Board.
The Board has established the following committees to assist it in carrying out its responsibilities: (a) Audit/Finance Committee; (b) Executive Committee; (c) Management Resources Committee; (d) Nominating/Corporate Governance Committee; and (e) Technology Advisory Committee. The Board may appoint additional committees from time to time as it deems appropriate.
7. Committee Membership.
Committee members will be appointed by the Board upon recommendation of the Corporate Governance/Nominating Committee after taking into account the desires, experiences, and expertise of individual directors. Members of the Audit/Finance Committee, the Management Resources Committee, and the Nominating/Corporate Governance Committee will be independent directors under the rules of the New York Stock Exchange. Members of the Audit/Finance Committee will also satisfy the independence requirements for members of audit committees prescribed under the Sarbanes-Oxley Act. The Board believes that consideration should be given to rotating committee members periodically, but does not believe that rotation should be mandated as a policy.
8. Committee Structure.
Each committee will have its own charter which will be published on the Company's website. The charters will set forth the purposes and responsibilities of the committees as well as procedures for committee member appointment and removal, committee structure and operations, and committee reporting to the Board. The charters will also provide that each committee will annually evaluate its charter and performance.
1. Access to Management.
Members of the Board will have complete access to Company management. Members of senior management who are not Board members will be invited to attend Board meetings, and the Board encourages senior management, from time to time, to bring members of management to Board meetings in order to provide additional insights into the matters under discussion as well as to provide individuals with exposure to the Board for purposes of management development. Directors may suggest possible guests to the Chairman.
2. Access to Advisors.
The Board of Directors and its committees have the right, at any time, to engage at the Company's expense such independent legal, financial, or other advisors as they deem appropriate in connection with the performance of their duties.
The Nominating/Corporate Governance Committee will be responsible for recommending compensation and benefits for non-employee directors. Non-employee director compensation and benefits will be set at levels that are consistent with market practices, taking into account the size and scope of the Company's business and the responsibilities of its directors. The Board believes that a meaningful portion of director compensation should be in the form of Company stock, and each non-employee director is expected to retain a personal investment in Company stock. Absent unusual and compelling circumstances, non-employee directors will receive no additional compensation, in the form of consulting fees or other specific benefits, beyond that provided for service on the Board.
The General Counsel, the Chief Financial Officer, and the Corporate Secretary will be responsible for providing an orientation for new directors and for periodically providing information to directors on subjects that will assist them in discharging their duties. Directors may participate in continuing education programs, and the Company will pay the reasonable costs of attendance by a director at such programs.
The Management Resources Committee will evaluate the performance of the Chief Executive Officer at least annually as provided in the charter for that committee.
The Board of Directors views the selection of the Chief Executive Officer as one of its most important responsibilities. The Board has delegated responsibility for review of management succession plans to its Management Resources Committee, although the full Board would approve the hiring of any new Chief Executive Officer. The Management Resource Committee's responsibility includes development and periodic review of policies and principles for CEO selection and performance review, as well as policies regarding succession in the event of an emergency or the retirement of the Chief Executive Officer.
To assist the Board and the Management Resources Committee in succession planning, the Chief Executive Officer is expected to provide an annual report to the Management Resources Committee providing an assessment of senior managers and their potential to succeed him or her, either in the event of a sudden emergency or in anticipation of the Chief Executive Officer's future retirement. This assessment is expected to include a recommendation as to a successor should he or she be unexpectedly unable to perform his or her duties.
The Company will maintain a Code of Business Conduct and Ethics which sets forth for our directors, officers, and employees the professional and ethical framework within which business decisions should be made at the Company. The Code should include provisions relating to conflicts of interest, compliance with laws, confidentiality, and fair dealing, among others. Any waiver of the code for a director or executive officer will be subject to approval by the Board and will be promptly disclosed to stockholders in a manner consistent with the requirements of the New York Stock Exchange and applicable law. In the case of the consideration of a waiver in favor of a director, the director may not participate in the deliberation or vote relating to such waiver.
The Board, with the assistance of the Nominating/Corporate Governance Committee, will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. This evaluation will focus on the Board and its committees' contribution to the Company and specifically review areas in which the Board or the management believes a better contribution could be made. Its purpose is to increase the effectiveness of the Board.