1.1 Selection of Board Members. Each year at the Company’s annual meeting, the Board recommends a slate of Directors for election by shareholders. The Board’s recommendations are based on its determination (using advice and information supplied by the Nominating and Governance Committee) as to the suitability of each individual, and the slate as a whole, to serve as Directors of the Company, taking into account the membership criteria discussed below.
Shareholders may recommend Director nominees for consideration by the Nominating and Governance Committee by writing to the Company’s Secretary specifying the nominee's name and the qualifications for Board membership. Following verification of the shareholder status of the person submitting the recommendation, all properly submitted recommendations are brought to the attention of the Nominating and Governance Committee. Shareholders may also nominate Directors for election at the Company's annual meeting of shareholders by following the provisions described in the Company’s proxy statement.
1.2 Board Membership Criteria. The Nominating and Governance Committee works with the Board on an annual basis to determine the appropriate characteristics, skills, and experience for the Board as a whole and its individual members. In evaluating the suitability of individual Board members, the Board takes into account many factors, including relevant experience, intelligence, compatibility, reputation for integrity, professional background, understanding of the Company's business, and any other factors deemed relevant. The Board evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of the business and represent shareholder interests through the exercise of sound judgment, using its diversity of experience. In determining whether to recommend a Director for re-election, the Nominating and Governance Committee also considers the Director’s past attendance at meetings and participation in and contributions to the activities of the Board.
1.3 Independence. The Board believes that a substantial majority of our Directors should be "independent,'' not only as that term may be defined by the New York Stock Exchange, but also without the appearance of any conflict in serving as a Director. To be considered independent under these Guidelines, the Board must determine that a Director does not have any direct or indirect material relationship with the Company (other than in his or her capacity as a Director). We have established standards to assist in determining whether a Director has a direct or indirect material relationship. These independence standards are attached to these Guidelines.
1.4 Term Limits. The Board does not believe it should limit the number of terms for which an individual may serve as a Director. The Board believes that Directors who have served on the Board for an extended period of time are able to provide valuable insight into the operations and future of the Company based on their experience with and understanding of the Company’s history, policies, and objectives. The Board believes that, as an alternative to term limits, it can ensure that the Board continues to evolve and adopt new viewpoints through the evaluation and nomination process described in these guidelines.
1.5 Age Policy. It is the policy of the Board that no Director shall stand for election after the age of 75. A Director elected to the Board at or before the age of 75 may continue to serve until the expiration of the term during which he or she turns 76.
1.6 Directors with Significant Job Changes. When a Director’s principal occupation or business association changes substantially during his or her tenure as a Director, that Director should tender his or her resignation for consideration by the Nominating and Governance Committee. The Nominating and Governance Committee will recommend to the Board the action, if any, to be taken with respect to the resignation.
1.7 Limitation on Other Board Service. Directors are expected to advise the Chairman of the Board and the Chairman of the Nominating and Governance Committee before accepting any other public company directorship or any assignment to the audit committee or compensation committee of the board of directors of any public company of which such Director is a member. Directors may not serve on more than four boards of public companies, including the Company’s Board.
1.8 Conflicts of Interest. All Directors must comply with the applicable provisions of the Company's Business Practices Policy. If a Director has a personal interest in any matter that is being considered by the Board for approval, that Director must disclose the interest to the Board, excuse himself or herself from participation in the discussion, and not vote on the matter.
1.9 Election of Directors. The Board of Directors recognizes the continuing evolution of investor views and related initiatives addressing the appropriateness of Director elections using a majority vote standard, rather than the current plurality standard. The Board notes that these views and initiatives raise uncertainties as to the legal and practical implications of a change in practice, making amendments to the Company’s Articles of Incorporation or Bylaws a less desirable means of addressing the investor concerns at this time. Nonetheless the Board recognizes that certain modifications to the Company’s current election procedures can effectively provide for majority vote principles. Therefore, the Board of Directors is adopting the following Guideline.
In an uncontested election of directors (i.e., an election where the only nominees are those recommended by the Board of Directors), any nominee for Director who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election by shareholders present in person or by proxy at the Annual Meeting of Shareholders and entitled to vote in the election of Directors (“Majority Withheld Vote”) will promptly tender his or her resignation to the Chairman of the Board following certification of the shareholder vote.
The Nominating and Governance Committee will promptly consider the resignation submitted by a Director receiving a Majority Withheld Vote and recommend to the Board whether to accept the tendered resignation or reject it. In considering whether to accept or reject the resignation, the Nominating and Governance Committee will consider all factors deemed relevant, including without limitation, the underlying reasons for the Majority Withheld Vote (if ascertainable), the length of service and qualifications of the Director whose resignation has been tendered, the Director’s contributions to the Company, compliance with listing standards, and the Company’s Corporate Governance Guidelines.
The Board will act on the Nominating and Governance Committee’s recommendation no later than at its first regularly scheduled meeting following certification of the shareholder vote, which action may include, without limitation, acceptance of the tendered resignation, adoption of measures designed to address the issues underlying the Majority Withheld Vote, or rejection of the tendered resignation. Following the Board’s decision on the Nominating and Governance Committee’s recommendation, the Company will promptly publicly disclose the Board’s decision and process (including, if applicable, the reasons for rejecting the tendered resignation) in a periodic or current report filed with the Securities and Exchange Commission.
To the extent that one or more Directors’ resignations are accepted by the Board, the Nominating and Governance Committee will recommend to the Board whether to fill such vacancy or vacancies or to reduce the size of the Board.
Any Director who tenders his or her resignation pursuant to this provision will not participate in the Nominating and Governance Committee recommendation or Board consideration regarding whether or not to accept the tendered resignation. If a majority of the members of the Nominating and Governance Committee received a Majority Withheld Vote at the same election, then the independent Directors who are on the Board who did not receive a Majority Withheld Vote will appoint a Board committee amongst themselves solely for the purpose of considering the tendered resignations and will recommend to the Board whether to accept or reject them. This Board committee may, but need not, consist of all of the independent Directors who did not receive a Majority Withheld Vote.
This corporate governance guideline will be summarized or included in each proxy statement relating to an election of Directors of the Company.
1.10 Lead Director. The independent Directors shall annually designate a Lead
Director from among the independent Directors of the Board. Although designated
annually, the Lead Director is generally expected to serve for more than one year.
The Lead Director’s key role is to work with the Chairman of the Board and the Chief Executive Officer to ensure that the Board (i) discharges its responsibilities, (ii) has structures and procedures in place to enable it to function independently of management, and (iii) clearly understands the respective roles and responsibilities of the Board and Management. The Lead Director will perform the following duties:
- Convene and chair regular executive session meetings of the non-management Directors and, as appropriate, provide prompt feedback to the Chairman of the Board and the Chief Executive Officer.
- Coordinate and develop the agenda for executive sessions of the independent Directors.
- Convene meetings of the independent Directors if necessary.
- Coordinate feedback to the Chairman of the Board and Chief Executive Officer on behalf of independent Directors regarding business issues and management.
- Final approval, after consultation with the Chairman of the Board and the Chief Executive Officer, as to the agendas for meetings of the Board and informational needs associated with those agendas and presentations.
- Performing such other duties as may be necessary for the Board to fulfill its responsibilities or as may be requested by the Board as a whole, by the non-management Directors, or by the Chairman of the Board.
- In the absence of the Chairman of the Board, act as chair of meetings of the Board.
- Be the designated spokesperson for the Board when it is appropriate for the Board to comment publicly on any matter.
- Be available for consultation and direct communication if requested by the Company’s major shareholders.