The role of the Board of Directors (“Board”)
of Ascent Solar Technologies, Inc. (the “Company”)
is to oversee the business and affairs of the Company
for the benefit of its stockholders. In addition,
the Board considers the interests of its other interested
parties, including its employees, customers, suppliers,
creditors and the communities in which the Company
does business. The Board has adopted these corporate
governance guidelines, as well as committee charters,
to provide a framework for the functioning of the Board
and Board Committees.
I. Board
Composition and Structure
Size
of Board. The number of members of the
Board generally should range from three to nine members,
recognizing that retirements, resignations and recruiting
delays may result, periodically, in the Board consisting,
for some transitional period, of a greater or lesser
number of directors than the Board may have targeted.
Mix
of Directors; “Independent” Directors. A
majority of the Board must be “independent,” within
the meaning of Nasdaq and Pacific Exchange (“PCX”)
rules. No director will be deemed independent
unless the Board affirmatively determines that the
director has 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).
Categorical Standards. The
Board has established the following standards
to assist it in determining director independence. The
following will not be deemed independent:
a director who is, or at any time during
the past three years was, employed by the
Company or by any parent or subsidiary of
the Company;
a director who accepted or has a family
meber who accepted any payments from the
Company or any parent or subsidiary of the
Company in excess of $60,000 during the current
or any of the past three fiscal years, other
than the following: (i) compensation for
board or board committee service, (ii) payments
arising solely from investments in the Company’s
securities, (iii) compensation paid
to a family member who is a non-executive
employee of the Company or a parent or subsidiary
of the Company, (iv) benefits under a tax-qualified
retirement plan, or non-discretionary compensation
or (v) loans permitted under Section 13(k)
of the Securities Exchange Act of 1934;
a director who is a family member of an
individual who is, or at any time during
the past three years was, employed by the
Company or by any parent or subsidiary of
the Company as an executive officer;
a director who is, or has a family member
who is, a partner in, or a controlling shareholder
or an executive officer of, any organization
to which the Company made, or from which
the Company received, payments for property
or services in the current or any of the
past three fiscal years that exceed 5 percent
of the recipient’s consolidated gross
revenues for that year, or $200,000, whichever is
more, other than the following: (i) payments arising
solely from investments in the Company’s
securities or (ii) payments under non-discretionary
charitable contribution matching programs;
a director who is, or has a family member
who is, employed as an executive officer
of another entity where at any time during
the past three years any of the executive
officers of the Company have served on the
compensation committee of such other entity;
or
a director who is, or has a family member
who is, a current partner of the Company’s outside
auditor, or was a partner or employee of the Company’s
outside auditor who worked on the Company’s
audit at any time during any of the past
three years.
Board Determinations. For
relationships not addressed by the guidelines
in subsection (1) above, the determination
of whether the director is independent or
not shall be made by the Board of Directors,
subject to applicable exchange rules or legal
requirements.
Audit Committee
Independence Requirements. Audit
Committee members may not accept, directly
or indirectly, any consulting, advisory or
other compensatory fee from the Company or
any Company subsidiary. For the purpose
of this paragraph, compensatory fees do not
include fees for service on the Board or a
Board committee, or the receipt of fixed amounts
of compensation under a retirement plan (including
deferred compensation) for prior service with
the Company (provided that such compensation
is not contingent in any way on continued service). In
addition, Audit Committee members may not be
affiliated persons of the Company or any Company
subsidiary.
Selection
of Directors. In connection with its proxy
solicitation relating to the Company’s annual
stockholders’ meeting, the Board recommends
a slate of nominees for election by stockholders. In
addition, the Board fills vacancies on the Board
when necessary or appropriate. The Board’s
recommendations or determinations typically are based
on the recommendations of, and information supplied
by, the Nominating and Governance Committee, taking
into account the criteria described below and other
factors, including the requirements for Board committee
membership. In recommending nominees, the
Board will consider nominees recommended by stockholders.
Board
Membership Criteria. The Nominating and
Governance Committee is responsible for reviewing
with the Board, on an annual basis, the size, function
and needs of the Board, so that the Board as a whole
collectively possesses a broad range of skills, expertise,
industry and other knowledge, and business and other
experience useful to the effective oversight of the
Company’s business. The Board also seeks
members from diverse backgrounds so that the Board
consists of members with a broad spectrum of experience
and expertise and with a reputation for integrity. 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 that they can
make to the Company. In considering candidates
for nomination, the Nominating and Governance Committee
may, at the request of the Board from time to time,
review the appropriate skills and characteristics
required of Board members in the context of the current
make-up of the Board.
Additional
Directorships. Directors are encouraged
to limit the number of other boards of directors
(excluding non-profit and non-public boards of directors)
on which they serve, taking into account potential
meeting attendance, participation and other commitments
with respect to these other boards of directors. It
is generally advisable to limit outside directorships
to three. The Nominating and Governance Committee
and the full Board will take into account the nature
of and the time involved in a director’s service
on other boards of directors in evaluating the suitability
of individual director candidates. Prior to
accepting any invitation to serve on another public
company board of directors, a director must seek
and receive the consent of the Nominating and Governance
Committee. In determining whether to provide
such consent, the Nominating and Governance Committee
will consider any actual or potential conflict that
would result from the director’s service on
such board of directors.
Compensation
of Non-Employee Directors. Company management
should report periodically to the Compensation Committee
as to how the Company’s non-employee directors’ compensation
practices compare with those of comparable public
companies. The Board should make changes in
non-employee director compensation practices only
upon the recommendation of the Nominating and Governance
Committee after discussion and concurrence by a majority
of the independent directors of the full Board. Both
the Board and the Nominating and Governance Committee
should be guided by the following principles: compensation
should align directors’ interests with the
long-term interests of stockholders while not calling
into question their objectivity; and the structure
of the compensation should be simple, transparent
and easy for stockholders to understand.
II. Board
Meetings and Procedures
Board
Meetings.
Number of Meetings;
Attendance and Preparation. The
Board holds a minimum of four regularly scheduled
meetings per year. Directors are expected
to attend all regularly scheduled meetings
in person or telephonically and to have, prior
to the meetings, reviewed all written meeting
materials distributed to them in advance.
Selection of Agenda
Items. The Chairperson of the Board
and the Chief Executive Officer (“CEO”)
should establish the agenda for Board meetings;
however, directors may at any time suggest
that particular items be placed on the agenda
by providing the suggested item to the Chairperson
of the Board at least one week prior to the
relevant Board meeting.
Distribution of
Materials. The Company will distribute
written materials, including the agenda, for
use at Board meetings sufficiently in advance
of meetings to permit meaningful review. It
is recognized, however, that under certain
circumstances written materials may be unavailable
to directors in advance of the meeting. On
those occasions in which information regarding
a matter to be considered at a Board meeting
is too sensitive to provide in writing, the
Chairman of the Board may elect to contact
each director by telephone in advance of the
meeting to discuss the subject and the principal
issues the Board will need to consider.
Attendance of Non-Directors. Attendance
at Board meetings is typically limited solely
to Board members. However, the Board retains
the authority to invite executive officers, key
personnel and other persons to attend Board meetings
when deemed appropriate.
Executive Sessions
of Non-Employee Directors. The non-employee
directors will meet in executive session at
least once a year outside of the presence of
any management directors and any other members
of the Company’s management who may otherwise
be present. During at least one session
per year, only independent directors may be
present. During executive sessions, the
directors may consider such matters as they
deem appropriate. Following each executive
session, the results of the deliberations and
any recommendations should be communicated
to the full Board. The Board will establish,
or direct a committee of the Board to establish,
a method for interested parties to communicate
directly with the non-employee directors.
Access
to Senior Management/Independent Advisors. Board
members have complete and open access to senior members
of management. The CEO will invite other key
employees to attend sessions prior to the Board meeting
if the CEO believes they can provide meaningful information
to the Board. The Board, including the independent
members of the Board, have the authority, in their
discretion and at the Company’s expense, to
retain independent advisors.
Access
to Stockholders and Other Interested Parties. The
Chairperson of the Board and the CEO are responsible
for establishing effective communications with the
Company’s stockholders, customers, associates,
communities, suppliers, creditors and corporate partners. Directors
are not precluded from meeting with such parties,
but any such meetings generally should be held with
management present.
Confidentiality. The
Board believes that maintaining confidentiality of
information and deliberations is an imperative.
III. Board
Duties and Responsibilities
Oversight. To
accomplish its mission to maximize long-term stockholder
value, the Board must:
Confirm that the Company
has processes in place designed to ensure that
the Company operates in a legal, ethical, and
socially responsible manner;
Select, evaluate, and
offer substantive advice and counsel to the CEO
and work with the CEO to develop effective measurement
systems that facilitate an evaluation of the
Company’s degree of success in creating
long-term economic value for its stockholders;
Review, approve, and
monitor fundamental financial and business strategies
and major corporate actions;
Oversee the Company’s
capital structure and financial policies and
practices;
Assess major risks facing
the Company and review options for their mitigation;
and
Provide counsel and
oversight on the selection, evaluation, development,
and compensation of executive officers and provide
candid feedback on their successes and failures.
Corporate
Governance. The Board will review and,
if it deems appropriate, approve changes to these
Corporate Governance Guidelines that have been recommended
to the Board by the Nominating and Governance Committee.
Charters. The
Board will review and, if it deems appropriate, approve
changes to the Company’s Audit, Compensation
and Nominating and Governance Committee charters,
including such changes as have been recommended to
the Board by such committees.
Education. The
Company has an educational program for new Board members
that includes extensive materials and meetings with
key management. Additionally, all directors
may periodically participate in continuing education
programs designed to improve their ability to perform
their duties.
Assessing
Board and Committee Performance. The Board
will conduct an annual self-evaluation of its performance
and an evaluation of each of the Board committees’ performance
to determine whether it and its committees are functioning
effectively. The Board’s evaluation will
be based, in part, on the Nominating and Governance
Committee’s evaluation of the Board, and the
self-evaluations conducted by each of the committees.
Assessing
CEO Performance. The Board believes that
the CEO’s performance should be evaluated annually
and as a regular part of any decision with respect
to CEO compensation. The Board has delegated
the responsibility to the Compensation Committee
to evaluate the CEO’s performance in the course
of approving CEO salary, bonus, and long-term incentives
such as stock and stock option awards. The
Compensation Committee is responsible for setting
annual and long-term performance goals for the CEO
and for evaluating his or her performance against
such goals. The Compensation Committee meets
annually with the CEO to receive his or her recommendations
concerning such goals and to evaluate his or her
performance against the prior year’s goals.
Succession
Planning. The Board plans for the succession
to the positions of CEO and other executive officers
of the Company. To assist the Board, the CEO
will periodically provide the Compensation Committee
with an assessment of the executive officers and
their potential to succeed him or her. The
results of this assessment will be reported to and
discussed with the Board.
Business
Conduct and Ethics. The Board believes
that, in order to maintain the highest ethical, legal,
and socially responsible conduct, the Company should
maintain appropriate codes of ethics and business
conduct that collectively will address: (i) conflicts
of interest, (ii) corporate opportunities, (iii)
confidentiality, (iv) fair dealing, (v) protection
and proper use of Company assets, (vi) compliance
with laws, rules, and regulations, and (vii) such
other matters as the Board deems appropriate. Such
codes also collectively will include standards of
conduct applicable to designated persons, including
the CEO and the senior financial officers, that are
reasonably designed to deter wrongdoing and to promote:
(i) honest and ethical conduct, (ii) full, fair,
accurate, timely, and understandable disclosure in
the periodic reports, proxy statements, and other
Company filings under the Securities Exchange Act,
(iii) compliance with applicable governmental
rules and regulations, (iv) the prompt internal reporting
of violations of the codes and (v) accountability
for adherence to the codes.
IV. Board
Committees
Board
Committees; Committee Charters. The Board
has the authority to establish committees, temporary
or permanent, as the Board deems advisable. Each
of the Audit Committee, the Compensation Committee
and the Nominating and Governance Committee will
consist of three or more directors, each of whom
will satisfy the independence requirements set forth
herein and any additional requirements set forth
in their respective charters and any other applicable
listing or regulatory requirements. The Nominating
and Governance Committee will recommend, and the
Board will designate, a chairperson of each committee. Each
of the Audit Committee, the Compensation Committee
and the Nominating and Governance Committee will
have appropriate written charters.
Committee
Agendas. The chairperson of each committee,
in consultation with the appropriate members of the
committee and management, will oversee the development
of his/her committee’s agenda.
Board
Oversight; Committee Reports. The Board
is responsible for overseeing the activities of its
committees (except where such committees have sole
authority to act pursuant to applicable law or a
listing standard) and for ensuring that the committees
are fulfilling their duties and responsibilities. The
Board will regularly receive reports from its committees
regarding their activities and will take such actions
as it deems necessary and appropriate in response
to these reports.
V. Other
Principles
Disclosure
and Review of Corporate Governance Principles. These
Corporate Governance Guidelines will be made available
on the Company’s website. The Nominating
and Governance Committee will review these Corporate
Governance Guidelines from time to time, but not
less frequently than annually, and will report on
the results of its review to the full Board.
Disclosure
Policy. The Board believes that it is imperative
that the Company promote full, fair, accurate, timely,
and understandable disclosure in the periodic reports
and other statements and reports required to be filed
by the Company under the securities laws.
