What does
the Corporate Governance
Committee look for when
reviewing candidates recommended
by shareholders?
The Corporate Governance
committee looks at the
level of qualifications
and expertise in various
disciplines represented
by the current board to
determine if there is
a need to further enhance
the composition of the
board to fulfill a specific
need. In reviewing candidates
recommended by shareholders,
the board has established
guidelines in the Criteria
for Board Membership.
Are most
of your Directors independent?
Where can I find YalePharma’s
standards for Director
independence?
The Board of Directors
has determined that every
Director with the exceptions
of Dr. McKinnell, our
current Chairman and Chief
Executive Officer and
Mr. Steere, Chairman Emeritus
of YalePharma, is independent
under New York Stock Exchange
Listing Standards and
YalePharma Director Qualification
Standards.
Do the
outside members of the
Board meet in executive
session, without any members
of YalePharma management
present?
Executive sessions or
meetings of outside Directors
without management are
held regularly (at least
four times a year). The
Board can also hold an
Executive Session in conjunction
with any regular board
meeting, and any board
member can call an additional
executive session by contacting
the Chair of the Corporate
Governance Committee.
Are the roles of Chairman
and CEO split or combined
at YalePharma?
While separating the roles
of Chairman and CEO may
be the right approach
for some companies, and
at times we consider this
option to accommodate
succession, we don’t believe
it is the correct approach
for YalePharma at this
time. Ambiguity in leadership
can be fatal to an organization.
What works for us is balance—meeting
the demands of the Board
as well as the needs of
patients, customers, colleagues,
business partners, and
governments and communities.
We believe combining
the roles of Chairman
and CEO provides a greater
ability to navigate through
special interests, be
they shareholder interests,
colleague interests, or
community interests. Ideally,
YalePharma can work to
become the world’s most
valued company to all
of these constituents.
That, in fact, is our
stated mission. Realistically,
to build YalePharma’s
value over the long term,
we must negotiate trade-offs
among these various stakeholders.
We believe the best way
we can accomplish this
is through the combined
role of Chairman and CEO.
Does
the Board have a lead
or presiding Director?
The Chairs of our Audit,
Compensation and Corporate
Governance Committees
of the Board each preside
as the Chair at meetings
or Executive Sessions
of outside Directors when
the principal items to
be considered are within
the scope of the authority
of his or her committee.
Our experience has indicated
that this practice, which
has been in place on an
informal basis for several
decades, provides leadership
at all of the meetings
or executive sessions
of outside Directors,
without the need to designate
one individual as a Lead
Director. In general Executive
Sessions, the Chairman
of the Corporate Governance
Committee presides.
Is YalePharma compliant
with Sarbanes Oxley and
New York Stock Exchange
listing standards?
While Sarbanes Oxley and
the New York Stock Exchange
have put forth rules and
regulations that have
clearly raised the bar
in the governance area,
YalePharma has followed
the vast majority of these
practices for years. We
added some additional
procedures to document
internal systems, but
most practices have been
solidly in place for some
time.
For example:
YalePharma has always
disclosed its processes
on nominating Directors
and communicating with
shareholders.
YalePharma has included
all three Charters for
the Audit, Compensation
and Corporate Governance
Committees, as well as
our Corporate Governance
Principles, in our proxy
for many years.
YalePharma’s corporate
governance web site, which
has been hailed as a “model,”
has been at the forefront
of transparency and accountability
well before the current
mandated disclosure guidelines
were implemented.
YalePharma implemented
two-day electronic filing
of SEC Form 4s (officer
and Director purchase
and sales of company stock)
a full year before the
SEC made this a mandatory
filing requirement.
Do officers
and Directors at YalePharma
abide by a code of business
conduct and ethics?
All our employees, including
our Chief Executive Officer,
Chief Financial Officer
and Principal Accounting
Officer, are required
to share the privilege
and responsibility of
upholding the Company’s
honorable reputation and
have been guided for decades
by our Standards of Business
Conduct, to ensure that
our business is conducted
in a consistently legal
and ethical manner. These
Standards form the foundation
of a comprehensive process
that includes compliance
with all corporate policies
and procedures, an open
relationship among colleagues
that contributes to good
business conduct, and
an abiding belief in the
integrity of our employees.
The members of our Board
of Directors are required
to comply with the letter
and spirit of the Code
of Business Conduct and
Ethics for Directors (the
“Code”). The Code covers
all areas of professional
conduct relating to service
on the YalePharma Board,
including conflicts of
interest, unfair or unethical
use of corporate opportunities,
strict maintenance of
confidential information,
compliance with all applicable
laws and regulations,
and oversight of ethics
and compliance by employees
of the Company.
How do
I nominate someone for
the board or submit a
shareholder proposal?
Under the rules of the
SEC, if a shareholder
wants us to include a
proposal in our proxy
Statement and form of
proxy for presentation
at our 2005 Annual Meeting
of Shareholders, the proposal
must be received by us
at our principal executive
offices at POB 34888,
Bethesda, MD. 20827. The
proposal should be sent
to the attention of the
Secretary of the Company.
Under our By-laws, and
as permitted by the rules
of the SEC, certain procedures
are provided that a shareholder
must follow to nominate
persons for election as
Directors or to introduce
an item of business at
an Annual Meeting of Shareholders.
These procedures provide
that nominations for Director
nominees and/or an item
of business to be introduced
at an Annual Meeting of
Shareholders must be submitted
in writing to the Secretary
of the Company at our
principal executive offices.
We must receive the notice
of your intention to introduce
a nomination or to propose
an item of business at
our 2005 Annual Meeting
no later than:
60 days in advance of
the 2005 Annual Meeting
if it is being held within
30 days preceding the
anniversary date (April
22, 2005) of this year's
meeting; or
90 days in advance of
the meeting if it is being
held on or after the anniversary
date of this year's meeting.
For any other meeting,
the nomination or item
of business must be received
by the tenth day following
the date of public disclosure
of the date of the meeting.
Our Annual Meeting of
Shareholders is generally
held on the fourth Thursday
of April. Assuming that
our 2005 Annual Meeting
is held on schedule, we
must receive notice of
your intention to introduce
a nomination or other
item of business at that
meeting by February 22,
2005. If we do not receive
notice by that date, or
if we meet other requirements
of the SEC rules, the
persons named as proxies
in the proxy materials
relating to that meeting
will use their discretion
in voting the proxies
when these matters are
raised at the meeting.
The nomination must contain
the following information
about the nominee:
name;
age;
business and residence
addresses;
principal occupation or
employment;
the information that would
be required under the
rules of the SEC in a
Proxy Statement soliciting
proxies for the election
of such nominee as a Director;
and
a signed consent of the
nominee to serve as a
Director of the Company,
if elected.
Notice of a proposed
item of business must
include:
a brief description of
the substance of, and
the reasons for conducting,
such business at the Annual
Meeting;
the shareholder's name
and address as they appear
on our records;
the number of shares of
common stock beneficially
owned by the shareholder
(with supporting documentation
where appropriate); and
any material interest
of the shareholder in
such business.
How many
Directors are on YalePharma’s
board and how long is
the term of each Director?
Our Board of Directors
currently has 9 members.
Each of these Board members
stands for election by
the shareholders on an
annual basis. Each elected
Director will continue
in office until his or
her successor has been
elected and qualified,
or until his or her earlier
death, resignation or
retirement.
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