Nominating and Corporate Governance Committee
CYPRESS SEMICONDUCTOR CORPORATION
CHARTER OF THE
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE OF THE
BOARD OF DIRECTORS
The purpose of the Nominating and Corporate Governance Committee (the “Committee”) is to assist the Board of Directors (the “Board”) of Cypress Semiconductor Corporation (the “Company”) in discharging its responsibilities with respect to:
A. The identification of individuals qualified to become directors and the selection or recommendation of candidates for all directorship positions to be appointed by the Board or elected by shareholders;
B. The evaluation of the continuation and/or termination of directorship of Board members;
C. The definition of the criteria for director continuing education programs in conjunction with the Company’s management;
D. Shaping and overseeing corporate governance policies, procedures and principles applicable to the Company and for periodically reviewing such policies, procedures and principles; and
E. Monitoring continuing education among Board members.
In addition, the Committee will undertake those specific duties and responsibilities listed below and such other duties as the Board may from time to time prescribe.
Composition and Qualifications
The Committee shall be comprised of at least two independent members of the Board, each of whom shall be appointed by, and serve at the discretion of the Company’s Board. Each Committee member must satisfy the requirements for independence under the rules of the Securities and Exchange Commission and set out in the Nasdaq Stock Market (“NASDAQ”) Listing Standards.
Appointment and Removal
The members of the Committee shall be appointed by the Board and shall serve until such member’s successor is duly elected and qualified or until such member’s earlier resignation or removal. The members of the Committee may be removed, with or without cause, by the Board.
Unless a Chairman of the Committee is elected by the Board, the Committee shall designate a Chairman by majority vote of the members. The Chairman will chair all regular sessions of the Committee and set the agendas for Committee meetings.
Delegation to Subcommittees
In fulfilling its responsibilities, the Committee shall be entitled to delegate any or all of its responsibilities to a subcommittee of the Committee.
Members of the Committee shall receive such fees for their service as Committee members as may be determined by the Board.
The Committee shall meet at least four times annually, or more frequently as circumstances dictate. The Chairman or any member of the Committee may request meetings of the Committee. At all meetings of the Committee, a majority of the authorized number of Committee members shall constitute a quorum for the transaction of business and the act of a majority of the Committee members present at any Committee meeting at which there is a quorum shall be the act of the Committee, except as may be otherwise specifically provided by statute (such as in the case of a recusal due to a conflict of interest) or by the Company’s Certificate of Incorporation.
Meetings of the Committee may be held telephonically. The Committee shall maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board. The Committee may also act by written consent, which shall constitute a valid action of the Committee if it has been executed by each Committee member and shows the date of execution. The written consent will be effective on the date of the last signature and will be filed with the minutes of Board meetings.
Consistent with the purposes of the Committee set forth above, the responsibilities and duties of the Committee shall include:
A. In consultation with the Board, consider and make recommendations to the Board concerning the appropriate size, function and needs of the Board, taking into account that the Board as a whole shall have competency in the following areas: (i) industry knowledge, (ii) accounting and finance, (iii) business judgment, (iv) management, (v) leadership, (vi) international markets, (vii) business strategy, (viii) crisis management, and (ix) corporate governance;
B. In consultation with the Board, determine the criteria for Board membership, including the appropriate qualifications, skills, character and integrity, general business and industry experience, leadership profile, strategic planning abilities and experience, aptitude in accounting or finance, expertise in domestic and international markets, industry knowledge, understanding of relevant technologies, communications and interpersonal skills, and ability and willingness to devote time as needed for Board services;
C. Assess, and make recommendations to the Board regarding, the independence of candidates for Board and Committee membership and annually assess, and make recommendations to the Board regarding the independence of the Board and Committee members.
D. Recruiting, evaluating and recommending candidates to be presented for appointment or election to serve as members of the Board including the review and recommendation to the Board regarding shareholder-recommended candidates for nomination to the Board. Conduct searches for prospective directors shall be made without regard to race, gender, age, religion, national origin, sexual orientation or physical limitation;
E. Evaluate and make recommendations to the Board concerning the appointment of directors to Board committees and the selection of Board chairs to such committees;
F. Evaluate as needed and address any concerns regarding the performance of any current directors, and recommend action to the chairman of the Board if needed;
G. Evaluate and recommend to the Board the responsibilities of the Board committees, including the structure, operations and the authority to delegate to subcommittees;
H. Review, at least annually, the Company's Corporate Governance Guidelines (the “Guidelines”) and recommend any changes to the Board for its approval and adoption;
I. Review and approve changes to the Company’s Code of Business Conduct and Ethics (the “Code of Conduct”) and recommend for Board approval any requested waivers of the Code of Conduct related to the executive officers or members of the Board;
J. Review and approve changes to the Company's Insider Trading Policy;
K. Review and recommend changes, as necessary, to the Company’s corporate governance disclosures;
L. Annually evaluate its own performance as well as oversee the evaluation of management and the annual self-evaluation of the Board and Board committees;
M. Report its activities and actions to the Board on a regular basis, but at least annually;
N. Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for its approval;
O. Adopt policies and procedures regarding stockholder recommendations of candidates for the Board;
P. Review and consider proxy statement proposals submitted to the Company for shareholder approval and ensure that such proposals, if approved, are implemented as approved;
Q. Determine the criteria and requirements for the Board’s director continuing education program; and track compliance with such program; and
R. Perform any other activities consistent with this Charter, the Company's Certificate of Incorporation, Bylaws, Guidelines and Code of Business Conduct and Ethics, as the Committee or the Board deems necessary or appropriate.
This list of responsibilities is presented for illustrative purposes and is not intended to be exhaustive. The Committee may conduct additional activities as appropriate in light of changing business, legislative, regulatory, legal or other conditions. The Committee, in discharging its oversight role, in consultation with the Board, may study or investigate any matter of interest or concern that the Committee deems appropriate. The Committee shall have the sole authority to obtain advice from internal and external legal, accounting, or other experts or advisors as deemed necessary by the Committee in the discharge of its responsibilities. The Committee shall have the authority to approve the fees payable to such advisors or experts and any other terms of retention. The Committee shall also have the sole authority to retain and terminate any search firm to be used to identify director candidates, including sole authority to approve the search firm’s fees and other retention terms.
Prior to joining the Cypress board, Michael S. Wishart was a member of the Spansion Inc. board of directors. Wishart has over 30 years experience as an executive advisor to the technology industry. Wishart previously held senior positions with Goldman, Sachs & Co., including chairman of Goldman’s Global Technology Group and managing director of Goldman Sachs, where he counseled senior executives on strategic issues. He retired from Goldman in 2011 as an advisory director. Prior to Goldman Sachs, he was managing director and co-head of the Global Technology Group of Lehman Brothers, and previously worked in the Investment Banking Division of Smith Barney, Harris Upham & Co.
Wishart is a member of the Investment Committee at Sacred Heart Schools, and is a member of the Management Board at the Stanford Graduate School of Business.
W. Steve Albrecht is the Gunnel Endowed Professor in the Marriott School of Management and a Wheatley Fellow at Brigham Young University (BYU). He served as the associate dean of the school until July 2008. Mr. Albrecht, a certified public accountant, certified internal auditor, and certified fraud examiner, joined BYU after teaching at Stanford University and the University of Illinois. Prior to becoming a professor, he worked as an accountant for Deloitte, an accounting firm. Mr. Albrecht is the past president of the American Accounting Association and the Association of Certified Fraud Examiners. He is a former trustee of the Financial Accounting Foundation that provides oversight to the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board. He is also a former trustee of COSO, the organization that developed the internal control framework used by most companies. He has consulted with numerous corporations on fraud, controls and financial reporting issues. He has been an expert witness in several large financial statement fraud cases. In addition to Cypress Semiconductor, he currently serves on the Boards of Directors of Red Hat, Inc. and SkyWest, Inc. Mr. Albrecht has written over 125 academic and professional articles and over 25 books, including a textbook on corporate governance and boards of directors. Mr. Albrecht holds a bachelor of science degree from Brigham Young University, a master's degree in Business Administration and a doctorate degree in Accounting from the University of Wisconsin.
Dan McCranie has served as the Chairman of the Board of Directors of ON Semiconductor Corporation from 2002 until 2017. Mr. McCranie also served on the Board of Directors of Mentor Graphics from 2012 to 2017. He served as Chairman of the Board of Directors of Freescale Semiconductors from 2011 until 2014 and on the Board of Directors of Cypress Semiconductor from 2005 through 2014. From 2014 to 2015, he served as Executive Vice President of Sales and Applications at Cypress Semiconductor. He also served as Executive Chairman of Virage Logic, from 2008 until 2010. Previously, Mr. McCranie served as President and Chief Executive Officer of Virage Logic from 2007 to 2008, Executive Chairman of Virage Logic from 2006 to 2007, and Chairman of the Board of Directors of Virage Logic from 2003 to 2006. He also served as Chairman of Actel Corporation from 2004 to 2010 and Chairman of Xicor Corporation from 2000 to 2004. Mr. McCranie was also employed in various positions with Cypress Semiconductor from 1993 to 2001. From 1986 to 1993, Mr. McCranie was President, Chief Executive Officer and Chairman of SEEQ Technology, Inc.