Corporate Governance Guidelines

LUXON HOLDINGS, INC.
CORPORATE GOVERNANCE POLICIES

The following general policies for corporate governance have been approved by the Board of Directors. They are not intended to replace the legal obligations of the Board, and are intended only to facilitate the efficient administration of the Board’s responsibilities.

I. BOARD COMPOSITION

Board Size. The Company’s Bylaws provide that the Board may from time to time prescribe the number of directors by amendment of the Bylaws. The Board may from time to time increase or decrease the size of the Board and will periodically review the optimum Board size. Effective January 6, 2008, the current Board will be comprised of at least three members.

Majority Independent Directors. By calendar year 2010, not less than a majority of the Board’s directors will consist of persons who are not and have not been during the past five years current employees of the Company and who otherwise meet and will continue to meet all standards of “independence” as prescribed from time to time by the Securities and Exchange Commission and by the listing standards of The New York Stock Exchange.
Subject to the maintenance of the foregoing majority independence standard, the Board anticipates, but does not direct, that the Company’s Chairman and Chief Executive Officer, both of which will continue to serve on the Board, and that the Board may also continue to nominate or appoint other non-employees whose business relationship with the Company may not qualify them as independent within the meaning of the foregoing standard, if their knowledge, experience, expertise or relationship with the Company are found by the Corporate Governance and Nominating Committee and by a majority of the independent directors to be valuable resources to help the Board fulfill its responsibilities.

Director Qualifications. The Board’s policy is to encourage selection of directors who will materially contribute the knowledge, business and financial expertise, skills, experience, diversity, integrity and leadership that a properly functioning Board must have in order to serve the best interests of its stockholders. At a minimum, a nominee must be found to meet the following standards for Board membership:

(a)	well regarded in the community, with a long term, good reputation for the highest ethical and moral standards;
(b)	good judgment;
(c)	an appreciation of the duties and responsibilities of a fiduciary;
(d)	a positive record of accomplishment in current and prior positions;
(e)	if on other boards, an excellent record of preparation, attendance, participation, initiative and interest; and
(f)	a commitment to prepare for, attend and actively participate in Board and Committee meetings and in periodic Board training sessions.

The Corporate Governance and Nominating Committee shall from time to time review the appropriate skills and characteristics required for Board membership and shall annually, in consultation with the Chief Executive Officer and other Board members, identify, screen and recommend nominees for Board membership in accordance with the principles set forth in this Charter. The Board shall be responsible for the ultimate selection of its nominees, unless a nomination is made by a stockholder in accordance with approved SEC and Bylaws procedures or as may be prescribed in a written contract between the Company and a third party.
The Company shall encourage its directors to take advantage of and to participate in educational opportunities in the areas of corporate governance, financial reporting, executive compensation and other areas of critical knowledge to enhance each Board member’s effectiveness.

Director Compensation. The level of compensation of non-employee directors shall be evaluated and recommended to the Board by the Compensation Committee, and shall be approved by the Board from time to time. Board compensation for non-employee directors may consist of a combination of cash and stock-based awards, so as to balance current compensation with longer-term equity incentives. Any stock-based compensation to non-employee directors, however, must be approved by the Board and, as and when required by applicable SEC or NYSE rules or listing standards, by stockholders.
The Compensation Committee should periodically review, and from time to time may request management’s and/or an outside consultant’s or advisor’s input and assistance regarding appropriate compensation for board and committee service (including any special service requirements or responsibilities of certain committees and committee chairpersons).

Change in Professional Responsibilities; Retirement. Directors whose professional responsibilities or status may change from that which existed when they were elected to the Board or appointed to a committee should not be required to resign as a director. The Corporate Governance and Nominating Committee should, however, review the changed circumstances in determining the merits of continued future Board or committee membership.
The Board does not believe that a fixed retirement age for directors is appropriate.

II. BOARD COMMITTEES
A.	Committees. The Board’s current committees are the Audit Committee, the Corporate Governance and Nominating Committee, and the Compensation Committee. The Board may also from time to time establish other committees or disband or modify the functions of existing committees in accordance with applicable corporate law, the Company’s Articles of Incorporation and Bylaws, SEC rules and NYSE listing requirements.
B.	Committee Member Selection and Service. The Board will appoint the members and the chair of each committee, upon recommendation of the Corporate Governance and Nominating Committee. Committee membership should, to the extent practicable, attempt to match each committee’s function and need for expertise with individual skills and experience. A director may serve on not more than two committees. The membership of the Audit, Corporate Governance and Nominating, and Compensation Committees shall consist of not less than three (3) nor more than five (5) directors, each of whom shall meet (1) all criteria for “independence” that may be prescribed from time to time by SEC, NYSE and tax rules, listing standards and regulations applicable to such committees, (ii) the definition of a “non-employee director” within the meaning of Rule 16b-3 promulgated by the SEC under the Securities Exchange Act of 1934, and (iii) the definition of an “outside director” within the meaning of Section 162(m)(4)(C) of the Internal Revenue Code.
C.	Committee Functions. Each committee will have and function under its own charter, which will be approved and adopted by the Board. The number and content of committee meetings and other matters of committee governance will be determined by each committee in accordance with the authority and responsibilities delegated to the committee by the Board, the committee’s charter, and any applicable legal, regulatory, accounting or governance principles. The chairperson of each committee, after consultation with the Chairman of the Board, will develop the committee’s agenda for each meeting. Each committee shall inform the Board, at regular Board meetings, unless circumstances otherwise demand, of actions taken or issues discussed at their meetings.

III. BOARD MEETINGS
A.	Scheduling. Regular Board meetings will be scheduled in advance,no less frequently than semi-annually, and shall be scheduled by the Chairman of the Board, or in the absence of a Chairman of the Board, by the Chief Executive Officer. Special Board meetings shall be held, in accordance with the Bylaws, at any time, and shall be set either by the Chairman of the Board or Chief Executive Officer or by any director or group of directors, if any, calling for the special meeting.
B.	Agenda and Materials. The Chairman of the Board or Chief Executive Officer will establish the agenda for each regular meeting and all special meetings, except for those, if any, called by a director, and will arrange for the agenda as well as any necessary or appropriate additional information and background materials to be sent to each director as far in advance of each meeting to enable each such director to properly study and comprehend the issues and to come prepared to discuss them at the meeting, particularly when involving matters of finance, potential acquisitions, strategic planning and compensation. Discussions, arguments for and against, and debates concerning critical Board or committee business, to the maximum extent practicable, should involve the entire Board committee as such. Any Board member, either before or at a meeting, may ask for inclusion on the agenda of other subjects that were not on the agenda for that meeting.
C.	Strategic Planning. At least one meeting annually will be devoted to the subject of short-term (current year) and long-term (multi-year) strategic planning, including the development of both general and specific goals and objectives, and to the review and assessment of previously established goals, objectives and plans.
D.	Access to Information. The Company’s executive management and independent auditors will be accessible to each Board member, and each Board member will also be given access to the Company’s employees when, as and if needed. Each director will use his or her judgment to ensure that any such contact is not disruptive to relationships or to the Company’s business operations and, to the extent practicable, will coordinate any such contact with the Chief Executive Officer. The Board and each of its committees shall be entitled to any necessary staff support and shall have the authority to retain such outside consultants and advisors as it or they deem necessary or appropriate to assist them in the discharge of their responsibilities.
E.	Board Interaction with Company Constituencies and the Public. Management speaks for the Company, including all communications about the Company with employees, the press, media, investors and other constituencies, and sets policies for those communications. Individual Board members may, from time to time, at the request of the Chief Executive Officer, meet or otherwise communicate with certain constituencies.
F.	Independent Directors Meetings. The independent members of the Board, including non-management Board members who may not be deemed independent, shall meet periodically, not less frequently than annually, in executive session, without management, either before or after Board meetings or at such other time or times as they deem appropriate. One or more of the Company’s finance staff, senior internal audit executive, other employees, consultants, independent auditor or other advisors may be invited to attend these meetings. The director who presides at such meetings shall be the Chairman of the Board, if that person is not also the Chief Executive Officer, or if the Chairman is the Chief Executive Officer, the independent directors shall appoint the person to preside at such meetings.

IV. MANAGEMENT RESPONSIBILITIES
A.	Financial Reporting, Legal Compliance and Ethical Conduct. The Board’s governance oversight functions do not relieve the Company’s executive management of its primary responsibility for the preparation of financial statements which accurately and fairly present the Company’s financial results and condition. Executive management shall maintain systems, procedures and a corporate culture that promotes respect for and compliance with all legal and regulatory requirements and the ethical conduct of the Company’s business.
B.	Officer Evaluation. The Compensation Committee shall conduct, and shall review with the non-management directors, with input from the Chief Executive Officer, an annual evaluation of the performance of all officers, including the Chief Executive Officer.
C.	Succession Planning. The Chief Executive Officer shall periodically review succession and development planning for senior executive officers with the Board, including anticipated retirements or other senior executive changes or needs.
D.	Board Self-Evaluation. The Corporate Governance and Nominating Committee is responsible for coordinating an annual self-evaluation by the directors of the Board’s performance, each director’s performance, and the performance of each committee member.