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Introductory Note: the Board of Directors of OmniVision Technologies, Inc. has developed
corporate governance practices over time to help it fulfill its responsibilities to oversee the
actions of management and the performance of the Company. The governance practices are set
forth in these guidelines to confirm that the Board will have the requisite authority and
processes in place to (i) approve the Company's business strategy as developed by
management, (ii) continually evaluate the Company's business results, and (iii) assure that the
interests and actions of directors and management are aligned with those of OmniVision's
Role of the Board of Directors
The Board of Directors is the ultimate decision-making body of OmniVision Technologies, Inc.,
except with respect to those matters reserved to the stockholders. The Board selects the Chief
Executive Officer and consults with the CEO with respect to the rest of the senior management
leadership. The Board acts as an advisor and counselor to senior management and oversees its
To satisfy its responsibilities, directors provide oversight in the formulation of the long term
strategic, financial and organizational goals of the Company and of the plans designed to
achieve those goals. In addition, the Board reviews and approves standards and policies to
ensure that the Company is committed to achieving its objectives through the maintenance of
the highest standards of responsible conduct and ethics and to assure that management carries
out their day-to-day operational duties in a competent and ethical manner.
The day-to-day business of the Company is carried out by its employees, managers and officers,
under the direction of the CEO and the oversight of the Board, to enhance the long term value
of the Company for the benefit of stockholders.
The directors have full access to management and other employees, as well as to the
Company's records and documents. The Board may also seek legal or other expert advice from
a source independent of management. The Board has the authority to hire outside advisors at
the Company's expense if they feel it is appropriate.
Composition of the Board
Qualification. The Corporate Governance and Nominating Committee assesses the credentials and qualities
of prospective directors, and reviews the performance of continuing directors in nominating
them for election by stockholders. In performing these duties, the Committee will take into
consideration such factors as judgment, skill, diversity, knowledge of the semiconductor
industry, experience with businesses and other organizations of comparable size, understanding
of fiduciary and governance responsibilities in publicly held companies, actual or potential
conflicts of interest, number of Board positions held with other companies, particular needs of
the Board or its Committees to optimize their effectiveness, and such other factors as the
Committee deems appropriate.
Selection. The Corporate Governance and Nominating Committee considers candidates for
Board and Committee membership. Potential director candidates for consideration may be
identified through the Committee's own initiatives or offered by management, by other directors on the Board, or by the Company's stockholders. Final approval of candidates to fill
vacancies or for election by the stockholders is determined by the full Board.
Compensation. OmniVision employees serving as directors do not receive additional
compensation for their services as directors. The compensation for non-employee directors is
intended to be competitive with that of other public companies of comparable size. The
Compensation Committee reviews the compensation of directors and reports its
recommendations to the Board as appropriate. Any change in Board cash compensation should
be approved by the full Board.
Orientation and Continuing Education. Meetings of the Board shall be designed to provide
orientation for new directors to assist them in understanding the Company's business as well as
an introduction to the Company's senior management. The Company also will encourage and
support the activities of its directors in attending corporate governance and other professional
development and training programs designed for Board members of similarly situated
Chairman. The Chairman of the Board is selected by the Board. The Board does not have a
policy on whether or not the roles of the Chairman and the Chief Executive Officer should be
separate. The Board believes it should be free to determine what is best for the Company at a
given point in time.
Functioning of the Board
Meetings. The Board shall have meetings as it deems appropriate for review and discussion of
leadership continuity, management development, management reports on the performance of
the Company, its plans and prospects, as well as more immediate issues facing the company.
Directors are expected to attend Board and Committee meetings and to spend the time needed
to prepare for a meeting. The Chairman or CEO will establish the agenda for each Board
meeting, with the understanding that certain items pertinent to the advisory and monitoring
functions of the Board will be brought to it periodically for review and/or decision. Any member
of the Board may request that an item be included on the agenda. At a Board meeting any
member of the Board may raise a subject that is not on the agenda for that meeting. To the
extent possible, materials related to agenda items are to be provided to the Board members
sufficiently in advance of the meeting as necessary to allow the members to prepare for
discussion of the items at the meeting.
Board Evaluation. The Corporate Governance and Nominating Committee is responsible for
coordinating evaluations by the directors of the Board's performance and for establishing
evaluation criteria and conducting the evaluations. Each evaluation should focus on areas in
which the Board believes contributions can be made going forward to increase the effectiveness
of the Board. As part of this process directors will conduct an evaluation to review the progress
and effectiveness of the Board and its committees, and will submit comments to the Corporate
Governance and Nominating Committee. The Corporate Governance and Nominating Committee
will then report back to the Board, and the full Board will consider and discuss the committee's
CEO Evaluation. The Board will review the performance of the CEO as appropriate and report its
findings to the Compensation Committee. The Compensation Committee will establish the long-term and short-term compensation and performance goals for the CEO, unless otherwise
determined by a majority of the independent directors.
Management Succession. The Board will plan for the succession of the CEO as well as other
senior management positions. Succession planning can be critical in the event the CEO or other
key executives should cease to serve for any reason, including resignation or unexpected
disability. In addition, however, the Board believes that establishment of a strong management
team is the best way to prepare for an unanticipated executive departure.
Access to Management; Independent Advisors. Directors have unrestricted access to members
of management and employees of the Company. The Board welcomes regular attendance at
Board and Committee meetings of executive officers and other members of OmniVision
management. The Board and/or the Committees of the Board also have the ability to hire, at
OmniVision's expense, independent advisors when it is deemed necessary or advisable to do so.
The directors rely on the advice, reports and opinions of management, counsel and expert
Executive Sessions and Meetings with Outside Auditors. Executive sessions, or meetings of
outside directors without management present, are held as part of each regularly scheduled
Board meeting and at such other times as requested by an outside director. It is understood
that Company personnel and others attending Board meetings may be asked to leave the
meeting in order for the Board to meet in executive session. In addition, the Audit Committee
of the Board should meet periodically with the Company's outside auditors without
management present at such times as it deems appropriate.
Communications with Constituencies. Communications about OmniVision with the press, media
and other constituencies (e.g., stockholders, customers, communities, suppliers, creditors,
regulators and corporate partners) should be made by individuals designated by the Company.
Individual Board members may from time to time, at the request of the CEO, meet or otherwise
communicate with various constituencies of the Company.
To ensure that the interests of the Company's stockholders can be made known directly to the
Board, the Board has established procedures to enable stockholders to communicate with the
non-employee directors designated.
Committees of the Board
Committee Structure. All major decisions are considered by the full Board. The committee
structure of the Board is limited to those committees considered by the Board to be basic to or
required for the operation of a publicly owned company. Currently those committees are the
Audit Committee, the Corporate Governance and Nominating Committee and the Compensation
Committee. Each committee has its own charter setting forth the purposes of the committee as
well as qualifications for committee membership. Annually, the chair of each committee should
review the existing committee charter and determine, in consultation with the rest of the
committee, whether any amendments are required.
Functioning of the Committees. The chair of each Committee determines the frequency and
length of the Committee meetings and develops the agenda for each meeting consistent with
each Committee's respective charter. The chair of each Committee should feel free to call
additional committee meetings at times other than the scheduled meetings of the full Board.
Materials related to agenda items are to be provided to the Committee members sufficiently in advance of the meeting where necessary to allow the members to prepare for discussion of the
items at the meeting.
Assignment and Rotation of Committee Members. Committees should be appointed (or
reappointed), and chairs of each committee designated, by the full Board, upon
recommendation by the Corporate Governance and Nominating Committee, in consultation with
the Chairman and CEO. While composition of the committees of the Board should be looked at
as appropriate in making certain that these committees are not stagnant or without fair
representation, it is the Board's belief that continuity of experience in the specific functions of
these committees provides a significant benefit to the stockholders and to management.
Code of Conduct, Conflicts of Interests, Related Party Transactions and Complaints Process
The Corporate Governance and Nominating Committee shall review and approve the Company's
code of business ethics and conduct which is applicable to directors, officers and employees;
consider questions of possible conflicts of interest of Board members and corporate officers;
review actual and potential conflicts of interest (including corporate opportunities) of Board
members and corporate officers; and approve or prohibit any involvement of such persons in
matters that may involve a conflict of interest or corporate opportunity. Directors may be asked
from time to time to leave a Board meeting when the Board is considering a transaction in
which the director (or another organization in which the director is a director or officer) has a
financial or other interest.
The Audit Committee shall review and approve in advance any proposed related party
transactions in compliance with all applicable laws, regulations, and rules and must present
material related party transactions to the full Board for approval; review and approve the
financial code of ethics for its senior financial officers; monitor compliance with the Company's
financial code of ethics; and review and approve the Company's procedures for handling
complaints regarding accounting or auditing matters.
The Corporate Governance Guidelines are subject to modification from time to time by the
Board. The Corporate Governance and Nominating Committee and the Board should review
these guidelines as appropriate.