- Size. The size of the Board may fluctuate because of circumstances, but the number shall be consistent with the Company's organizational documents and allow for effective assignment to the Committees and proper distribution of the workload among members of the Board. On an annual basis, the Nominating and Governance Committee shall consider the size and composition of the Board and report to the full Board the results of its review and any recommendations for change.
- Director Independence. It is the policy of the Board of Directors that a majority of the members of the Board be independent of the Company's management. For a director to be deemed "independent", the Board shall affirmatively determine that the director has no material relationship with the Company or its affiliates (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company or its affiliates) or any member of the senior management of the Company or his or her affiliates. This determination shall be disclosed in the proxy statement for each Annual Meeting of Shareholders. In making this determination, the Board shall not deem a director to be independent if he or she:
- is, or within the past five years has been, employed by the Company or any of its affiliates;
- is, or within the past five years has been, affiliated with or employed by a present or former auditor of the Company or any of its affiliates;
- currently participates, or within the past five years has participated, in an interlocking directorate in which an executive officer of the Company or any of its affiliates serves on the compensation committee of a company that concurrently employs the director;
- is, or is a director, executive officer, general partner or significant equity holder (i.e., in excess of 10%) of an entity that is, a paid adviser, paid consultant or paid provider of other professional services to the Company, any of its affiliates, any member of senior management or any affiliates of a member of senior management, if the amount of such payments has exceeded $60,000 during the current fiscal year of the Company;
- is a director, executive officer, general partner or significant equity holder (i.e., in excess of 10%) of a significant purchaser of goods or nonprofessional services from, or supplier of goods or nonprofessional services to, the Company or any of its affiliates;
- is affiliated with or employed by a tax-exempt entity that receives significant contributions (i.e., more than 3% of the annual contributions received by the entity or more than $100,000 in a single fiscal year, whichever amount is lower) from the Company, any of its affiliates, any member of senior management or any affiliate of a member of senior management; or
- is a member of the immediate family of any person who would not qualify as independent under the foregoing standards; provided, that employment of an immediate family member of a director in a non-officer position shall not preclude the Board from determining that the director is independent.
For purposes of these Guidelines, the terms:
- "affiliate" means any corporation or other entity that controls, is controlled by or is under common control with the Company, as evidenced by the power to elect a majority of the board of directors or comparable governing body of such entity; and
- "immediate family" means spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone (other than employees) sharing a person's home.
The Nominating and Governance Committee shall undertake an annual review of the independence of all non-employee directors and report the results of such review to the full Board. In advance of the meeting at which this review occurs, each non-employee director shall be asked to provide the Board with full information regarding the director's business and other relationships with the Company and its affiliates and with senior management and their affiliates to enable the Nominating and Governance Committee to evaluate the director's independence. Directors have an affirmative obligation to inform the Board of any material changes in their circumstances or relationships that may impact their designation by the Board as "independent". This obligation includes all commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships between directors and the Company and its affiliates or members of senior management and their affiliates.
- Selection of New Directors. The Board of Directors is responsible for selecting candidates for Board membership and for extending invitations to join the Board of Directors through the Nominating and Governance Committee. Candidates are selected for their character, judgment, business experience and specific areas of expertise, among other relevant considerations, such as the requirements of applicable law and listing standards. The Board of Directors recognizes the importance of soliciting new candidates for membership on the Board of Directors and that the needs of the Board of Directors, in terms of the relative experience and other qualifications of candidates, may change over time. Candidates for membership on the Board may be provided by any director or shareholder, and the Board may retain professional search firms.
Consistent with its charter, the Nominating and Governance Committee is responsible for screening candidates (in consultation with the Chief Executive Officer), for establishing criteria for nominees and for recommending to the Board a slate of nominees for election to the Board of Directors at the Annual Meeting of Shareholders. After a concurrent review of all candidates by the Committee and the Chief Executive Officer, the Chairman of the Board shall interview the potential candidates selected by the Committee and Chief Executive Officer, and report his or her conclusions to the Committee, together with a recommendation of final candidates for interview by the members of the Committee. The Nominating and Governance Committee shall interview the final candidates and recommend to the full Board candidates for election based upon the results of the interview. Final approval of any candidate shall be determined by the full Board of Directors.
- Board Membership Criteria. Each member of the Board brings a unique and valuable perspective to the governance of the Company. When these unique skill sets are combined in an environment of interaction and respect, they provide the overall skill set of the Board and provide a strong governance structure. In considering candidates for election as a director, the Nominating and Governance Committee and the Board shall be guided in general by the following criteria:
- each director should be chosen without regard to sex, race, religion or national origin;
- each director should be an individual of the highest character and integrity and have the ability to work well with others;
- each director should have an inquiring mind, vision and good judgment;
- each director should be free of any conflict of interest which would violate any applicable law or regulation or interfere with the proper performance of the responsibilities of a director;
- each director should possess substantial and significant business experience in specific areas of expertise that would be important to the Company in the performance of the duties of a director;
- each director's skill set should be complementary to the background and experience of other Board members;
- each director should have sufficient time available to devote to the affairs of the Company in order to carry out the responsibilities of a director; and
- each director should have the capacity and desire to represent the balanced, best interests of all shareholders and objectively appraise management performance.
The Nominating and Governance Committee will evaluate the qualifications of each director candidate against the foregoing criteria in connection with its recommendation to the Board concerning his or her nomination for election or re-election as a director. The Nominating and Governance Committee, with direct input and advise from the Chief Executive Officer, is responsible for assessing the appropriate mix of skills and characteristics required of Board members in the context of the perceived needs of the Board at a given point in time and shall periodically review and update the criteria as deemed necessary. Diversity in personal background, race, gender, age and nationality for the Board as a whole may be taken into account in considering individual candidates.
Each director's continuation on the Board shall be reviewed at the expiration of his or her term and before that director is reconsidered for election. In connection with its annual recommendation of a slate of nominees, the Nominating and Governance Committee, in consultation with the Chairman of the Board, shall review and assess the contributions of those directors selected for re-election. At the conclusion of this process, the Chairman of the Nominating and Governance Committee shall report the Committee's conclusions to the full Board. The Board of Directors does not believe that it is advisable to establish term limits or mandatory retirement age limitations for its directors because they may deprive the Company and its shareholders of the contribution of directors who have been able to develop valuable insights into the Company and its operations over time. However, once a director reaches the age of 72, the assessment process described above shall be modified for such director so as to include an evaluation of what effect (if any) the director's age may have on his or her ability to continue to contribute to the Board. Each director that has reached the age of 72 shall abstain from participation in the deliberations and voting with respect to whether such Director (or any other director that has reached the age of 72) should be nominated by the Board for election by shareholders at the next Annual Meeting of Shareholders.
Individual directors who change the position he or she held when elected to the Board should notify the Chairman of the Nominating and Governance Committee. It is not the sense of the Board that the directors who retire or change from the position they held when they came on the Board should necessarily leave the Board. There should, however, be an opportunity for the Board, via the Nominating and Governance Committee, to review the continued appropriateness of Board membership under these circumstances. A director should also provide advance notice to the Chairman of the Board of his or her acceptance of any invitation to serve on the board of directors of any other company.
- Offices of Chairman of the Board and Chief Executive Officer. The offices of Chairman of the Board and Chief Executive Officer have been at times combined and at times separated. The Board has exercised discretion in combining or separating the positions as it has deemed appropriate in light of prevailing circumstances. The Board of Directors believes that the combination or separation of these offices should continue to be considered as part of the succession planning process. The Board further believes that it is in the best interests of the Company for the Board to make a determination as to the combination or separation of the offices of Chairman of the Board and Chief Executive Officer when it elects a new Chief Executive Officer.
The Nominating and Governance Committee shall report periodically to the Board of Directors regarding succession planning with respect to the office of the Chief Executive Officer and other members of executive management as may be determined by the Board of Directors.
- Former Chief Executive Officer's Board Membership. The Board believes that Board membership for a former Chairman or Chief Executive Officer is a matter to be decided in each individual instance. It is assumed that when the Chairman and/or Chief Executive Officer resigns from that position, he or she shall offer his or her resignation from the Board at the same time. Whether the Board shall accept or reject his or her resignation remains a matter for discussion at that time with the new Chairman and Chief Executive Officer, as appropriate, and with the Board. When discussing the retention of former officers on the Board, careful consideration of the independence criteria stated earlier, especially with regard to Committee assignments, should be given.
- Presiding Director. The intention of the Board is that one of the Company's outside directors (i.e., all directors who are not employees of the Company, regardless of their independence) shall serve as the "Presiding Director". The Presiding Director shall be appointed by the outside directors annually at the Annual Meeting of the Board of Directors. The Presiding Director shall act as chair of all executive sessions and shall be responsible for coordinating the activities of the other outside directors, including the establishment of the agenda for executive sessions of the outside directors, as required by these Guidelines and applicable listing standards. The Presiding Director shall also act as the liaison director for any informal confidential communications with the Chief Executive Officer outside of the normal Committee and Board procedures.
- Board Meetings.
Frequency and Conduct of Meetings. The Chairman of the Board shall, in consultation with the Chief Executive Officer, the General Counsel and the Presiding Director, prepare an annual schedule of meetings for the Board of Directors and the standing Committees thereof. Additional meetings may be scheduled as necessary or appropriate in light of the circumstances. Certain matters shall be addressed by the Board of Directors at least annually. These matters shall include a review of the Company's (i) strategic plan and the principal current and future risk exposures of the Company; (ii) strategic objectives; (iii) business and financial performance for the prior year, including a review of the achievement of strategic objectives; and (iv) the Company's compliance with applicable law and listing standards. The proposed annual schedule of meetings of the Board and its standing Committees shall be presented to the Board of Directors for approval.
The Chairman of the Board shall chair all meetings of the Board of Directors. The Secretary, the Chief Financial Officer, the General Counsel and such other members of management as may be requested by the Board shall also attend all meetings of the Board, subject to the Board's discretion to excuse one or more of these officers from all or portions of any meeting.
Outside directors shall meet in executive session with the Chief Executive Officer at least once each year to discuss matters relating to management succession (including the Chief Executive Officer's recommendation as to a successor should he or she be unexpectedly disabled) and management development and to evaluate members of executive management. In addition, outside directors shall meet in executive session without the Chief Executive Officer at least once each year to discuss the performance evaluation of the Chief Executive Officer and the approval of his or her compensation (which evaluation shall be communicated to the Chief Executive Officer by the Chairman of the Compensation Committee).
Agenda. The Chairman of the Board and the Chief Executive Officer (if not the same as the Chairman) shall establish an agenda for each meeting of the Board of Directors. Each Board member is free to suggest the inclusion of items on the agenda and is free to raise, at any Board meeting, subjects that are not on the agenda for that meeting. When possible, the Chairman of the Board and the Chief Executive Officer (if not the same as the Chairman) should be informed in advance of any items that a member wishes to raise at a Board meeting.
Information to be Distributed Prior to Meetings. Insofar as practicable, information to inform the directors about the Company's business, performance and prospects and regarding recommendations for action by the Board shall be made available to the Board a reasonable period of time before meetings. Information should be relevant, concise and timely. Requests for action by the Board of Directors should include the recommendation of management and be accompanied by any historical or analytical data that may be necessary or useful to the directors in making a determination as to the advisability of the matter.
Minutes. The Secretary of the Company shall record minutes of all meetings of the Board of Directors and shareholders. In the absence or incapacity of the Secretary, the Chairman may designate an Assistant Secretary, a director or outside counsel for the Company to record the minutes of meetings of the Board of Directors or shareholders. With respect to any matter, a director voting against a proposal may ask to have his or her dissent recorded in the minutes of the meeting, and the Secretary shall do so.
- Access to Management, Management Information and Counsel. Directors shall have free access to management and management information. Management shall be responsive to requests for information from Board members. The Board encourages the Chairman of the Board to invite members of management to make presentations at Board meetings in order to provide particular insights into aspects of the Company's business or to provide individuals with exposure to the Board of Directors for purposes of management development. Directors may suggest possible guests to the Chairman.
The Board of Directors, the Committees thereof and the Presiding Director (on behalf of the outside directors as a group) shall be entitled, at the expense of the Company, to engage such independent legal, financial or other advisors as they deem appropriate, without consulting or obtaining the approval of any officer of the Company, with respect to any matters subject to their respective authority.
- Board Interaction with Institutional Investors, the Press and other Constituencies. The Board believes that management speaks for the Company. Directors may, from time to time, be contacted by institutional investors, other shareholders, sellers of businesses or merger partners, governmental or community officials, analysts or the press to comment on or discuss the business of the Company. Directors are expected to refrain from communicating with any of the foregoing without prior consultation with the Chief Executive Officer or the Chief Financial Officer. Any proposed contact by a director in response to any inquiry by any governmental official shall also be notified in advance to the General Counsel of the Company.
In no event shall any director disclose any material non-public information concerning the Company. Among other considerations, such disclosures may violate applicable law. Questions about such information should be directed to the General Counsel. In the event that a director inadvertently discloses information that may be material and non-public, he or she should immediately so advise the General Counsel.
|
