Corporate Governance Policy
The Board of Directors (the "Board") of Silicon Laboratories Inc. (the "Company") has adopted this Corporate Governance Policy (this "Policy"). This Policy is subject to requirements of the charters and bylaws of the Company, as well as applicable law. The Board will review this Policy and other aspects of the Company's corporate governance as often as it deems necessary and may modify this Policy or waive any element of this Policy at any time.
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 stockholders. 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.
Each director should contribute to the experience, skills and other characteristics required of a properly functioning Board. Criteria include their personal and professional integrity, depth and breadth of experience, ability to make independent analytical inquiries, ability to understand the Company's business, willingness to devote adequate attention and time to duties of the Board and such other criteria as is deemed relevant by the Nominating and Corporate Governance Committee. The backgrounds and qualifications of the directors, considered as a group, should provide a diverse mix of experience, knowledge and skills.
The Board believes that, as a matter of policy and consistent with applicable laws, rules and regulations, independent directors should constitute at least a majority of the Board.
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 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.
A director who also serves as the Company's Chief Executive Officer should not serve on more than one board of a public company in addition to the Board and should not serve on the audit committee of any public company. Other directors should limit their service on the boards of other public companies so as not to impair the director’s service on the Board and should not serve on more than four public company boards in addition to the Board. All directors should inform the Chairman of the Nominating and Corporate Governance Committee prior to joining the board of another public company to ensure that any potential conflicts, excessive time demands or other issues are carefully considered.
Directors should offer their resignation to the Board in the event of any significant change in their personal circumstances, such as a material change in their principal job responsibilities.
The Board believes that 75 is an appropriate retirement age for all directors.
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.
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 Board separates the role of Chairman of the Board from the role of Chief Executive Officer, believing that this currently provides the most efficient and effective leadership model for the Company.
The Board considers it useful and appropriate to designate one of the independent Board members to serve as Lead Director, with responsibilities to: preside over executive sessions of the Company's independent directors; serve as principal liaison between the non-employee directors, the Chief Executive Officer, and the Chairman on sensitive issues; and perform such other duties and responsibilities as the Board may determine.
The Board believes that stock ownership by Board members further aligns their interests with the interests of the Company's stockholders. Accordingly, the Board has established a guideline that each Board member own Company shares equal to at least three times their annual retainer. The following shares will be counted in determining whether a Board member owns the requisite number of shares: Shares purchased on the open market; Shares obtained through option exercises; Shares owned jointly with, or separately by spouse and/or minor children, including shares held in trusts; Net after tax proceeds (using a 34% tax rate) of vested unexercised stock options; and Vested restricted stock/restricted stock unit shares. The value of the director's ownership shall be based on the average closing price of a share for the previous calendar year.
Board members as of the date this Policy was adopted (December 10, 2010) will have three years to meet these ownership guidelines. Going forward, new Board members will have three years from the time they join the Board to meet the ownership guidelines. In the event the requisite number of shares is increased by the Board, the Board members will have three years from the time of the increase to acquire any additional shares needed to meet such revised guidelines.
The Board has established a guideline that the Company's Chief Executive Officer should own Company shares equal to at least three times the Chief Executive Officer's annual salary. The following shares will be counted in determining whether the Chief Executive Officer owns the requisite number of shares: Shares purchased on the open market; Shares obtained through option exercises; Shares owned jointly with, or separately by spouse and/or minor children, including shares held in trusts; Net after tax proceeds (using a 34% tax rate) of vested unexercised stock options; and Vested restricted stock/restricted stock unit shares. The value of the Chief Executive Officer's ownership shall be based on the average closing price of a share for the previous calendar year.
The Chief Executive Officer as of the date this Policy was adopted (December 10, 2010) will have three years to meet these ownership guidelines. Going forward, a new Chief Executive Officer will have three years from the time such individual becomes the Chief Executive Officer to meet the ownership guidelines.
Apart from the above guidelines, the Company does not impose post-vesting holding period requirements with respect to restricted stock or stock options.
The independent directors of the Board will generally meet in executive session at the end of each regularly scheduled Board meeting and at any other time requested by a majority of the independent directors.
The independent members of the Board shall have access to Company employees in order to obtain any information they deem appropriate to fulfill their duties. The Board may establish a process for such inquiries. Management is encouraged to invite Company employees to Board meetings where management participation 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 a periodic self-evaluation. Each director will be requested to participate in an assessment of the effectiveness of the Board and any committee on which such director serves. The assessment of each committee will be reported by the chairman of such committee to the full Board.
Stockholders may communicate with any or all Company directors by transmitting written correspondence addressed to: Board of Directors c/o Corporate Secretary Silicon Laboratories Inc. 400 West Cesar Chavez Austin, TX 78701
Any such communication must contain (i) a representation that the stockholder is a holder of record of stock of the corporation, (ii) the name and address, as they appear on the corporation's books, of the stockholder sending such communication and (iii) the class and number of shares of the corporation that are beneficially owned by such stockholder. The Corporate Secretary will forward such communications to the Board or the specified individual director to whom the communication is directed unless such communication is deemed unduly hostile, threatening, illegal or similarly inappropriate, in which case the Corporate Secretary has the authority to discard the communication or to take appropriate legal action regarding such communication.
The Company will make every effort to schedule its annual meeting of stockholders at a time and date to maximize attendance by directors. All directors shall make every reasonable effort to attend the Company's annual meeting of stockholders.
The Board shall have an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. 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 generally have its own charter. The charters will set forth the purposes of the committees as well as qualifications for committee membership.
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 Board (or a committee thereof) shall conduct a periodic review of the Company's succession planning, including policies and principles for Chief Executive Officer selection and succession in the event of an emergency or the retirement of the Chief Executive Officer. If such review is conducted by a committee, the committee shall report its recommendation to the Board for approval.
The Company shall not make any loan to any director or executive officer.
Mr. Wood has served as a Director of Silicon Labs since March 1997 and as Lead Director since December 2005. Since 1996, Mr. Wood has also served as General Partner of various funds associated with Silverton Partners, a venture capital firm. From 1984 to 2003, Mr. Wood was a General Partner, and for certain funds created since 1996, a special limited partner, of various funds associated with Austin Ventures, a venture capital firm. Mr. Wood holds a B.A. in History from Brown University and an M.B.A. from Harvard University.
Mr. Lazar has served as a Director of Silicon Labs since 2013. He served as GoPro's Chief Financial Officer from 2014 through early 2016. During 2013, he was an independent business and financial consultant. Prior to that, Mr. Lazar was Senior Vice President of Corporate Development and General Manager of Qualcomm Atheros, following the acquisition of Atheros by Qualcomm in 2011. Mr. Lazar joined Atheros, a publicly traded provider of communications semiconductor solutions, in 2003 and served as Chief Financial Officer and Senior Vice President, Corporate Development. He also served as Executive Vice President and Chief Financial Officer of NetRatings, Inc., and Chief Financial Officer of Apptitude, Inc. He has held various executive positions at Electronics for Imaging and started his career at Price Waterhouse. Mr. Lazar is a certified public accountant and holds a B.S. in commerce with an emphasis in accounting from Santa Clara University.
Ms. Richardson became a Director of Silicon Labs in 2016. She is currently a Managing Director of Three Rivers Energy, an energy services company she co-founded in 2004. From February 2013 through February 2015, she also served as the Chief Operating Officer at GoPro. Previously, Ms. Richardson was an operations and management consultant for a diverse group of companies including Tesla Motors, Solaria and TouchTunes Interactive Networks. She also held a variety of executive positions at Flextronics, including vice president of strategic accounts. Ms. Richardson's early career included positions at Hughes Aircraft Ground Systems Group and Metcal. Ms. Richardson is also a board member for Zayo Group Holdings, a global provider of communications infrastructure services; SGI, a global leader in high-performance solutions for computing, data analytics and data management; and We Care Solar, a nonprofit organization providing solar-powered systems for maternity care. She holds a B.S. in Industrial Engineering from Purdue University and an Executive MBA from Pepperdine University.