- Role of the Board
- The role of the Board of Directors is to maximize
long-term shareholder value. The Board is the ultimate decision-making
body of the Company except for those matters reserved to the
shareholders. The senior management team is charged with the conduct of
the Company's business. The Board acts as an advisor and counselor to
senior management and monitors its performance.
- The Board also plans for succession of the Board's
Chair and the Chief Executive Officer. Succession planning will include
policies and principles for the CEO selection and performance review,
as well as a process for succession in the event of an emergency or
retirement of the CEO.
- Selection and Composition of the Board; Director
- The Board will consist of a majority of directors
who are independent as determined in accordance with New York Stock
Exchange Listing Standards. The Board will annually determine the
independence of each director and again if a director's affiliations
change during the year. To assist in making these determinations, the
Board will maintain director independence standards consistent with the
requirements of the New York Stock Exchange and applicable securities
- The Nominating & Corporate Governance Committee,
in consultation with the Chair, the CEO and the Lead Director, will
make recommendations to the Board concerning the appropriate size and
needs of the Board.
- The Nominating & Corporate Governance Committee
will identify potential director candidates and recommend to the Board
nominees for election as directors. The full Board will make the final
decision on director candidates. The Committee will search for director
candidates who: (i) have significant business
or public experience relevant and beneficial to the Board and the
Company, (ii) are willing and able to make a sufficient time commitment
to the affairs of the Company in order to effectively perform the
duties of a director, including regular attendance at Board and
committee meetings, (iii) are committed to the long-term growth and
profitability of the Company, and (iv) are individuals of character and
- In order to be nominated for election as a director,
a candidate must submit a contingent resignation to the Nominating
& Corporate Governance Committee. The resignation will become
effective only if (i) the director nominee
fails to receive an affirmative majority of the votes cast in the
director election, and (ii) the Board accepts the resignation. If a
director fails to receive an affirmative majority of the votes cast in
the director election, the Committee will make a recommendation to the
Board whether to accept or reject the director's resignation and
whether any other action should be taken. In determining votes cast,
abstentions and broker non-votes will not be counted.
- Non-employee directors may not serve on the boards
of more than four public companies without Board approval, and the
Chief Executive Officer may not serve on the boards of more than two
public companies without Board approval. Directors should notify the
Corporate Secretary in advance of accepting a seat on another board.
- After reaching age 72, a director will not stand for
election to the Board. However, the Board may waive this requirement
for an individual director if it believes continued service is in the
best interests of the Company and its shareholders.
- The Board values the contributions of directors
whose years of service have given them insight into the Company and its
operations and believes term limits are not necessary.
- When a director's principal occupation changes
substantially, the director will offer a letter of resignation from the
Board to the Chair of the Nominating & Corporate Governance
Committee. The Committee, in consultation with the Board's Chair, will
review the situation and recommend whether the Board should accept or
reject the resignation offer.
- Board Leadership
- The Board will appoint a Chair on an annual basis
and, in the event the Chair is also the CEO, will appoint a Lead
Director from among the independent directors. The Chair will preside
at all Board meetings and, in his or her absence, the Lead Director
- The Chair, the CEO and the Lead Director will set
the schedule and agenda for Board meetings. Any director may request
that an item be included on the agenda. Agenda items that fall within
the scope of responsibilities of a Board committee are reviewed with
the chair of that committee.
- The Chair, the CEO and the Lead Director will ensure
that directors receive Board materials sufficiently in advance of Board
meetings to allow them time to prepare for the meeting.
- At the invitation of the Board, members of senior
management recommended by the Chair, the CEO and/or the Lead Director
may attend Board meetings or portions thereof to participate in
discussions. Generally, presentations of matters to be considered by
the Board are made by the manager responsible for that area of the
- The Lead Director shall serve as a liaison between
the CEO/Chair and the independent directors. The Lead Director will be
a member of the Company’s finance committee and will (along with the
chair of the Audit Committee) review financial press releases prior to
issuance. The Lead Director will be the principal representative of the
independent directors in communicating with the Company’s shareholders.
- Director Responsibilities; Access to Management and
- Directors are expected to spend the time and effort
necessary to properly discharge their responsibilities, including
advance review of meeting materials. Directors are expected to
regularly attend Board and committee meetings, with the understanding
that occasional absences may be unavoidable. All directors are expected
to attend the annual meeting of shareholders.
- The Company will provide, and newly elected or
appointed directors are expected to attend, a comprehensive orientation
process for new directors that includes written materials, meetings
with key management and visits to Company facilities. The Company will
also provide or recommend to directors periodic continuing education
opportunities designed to enhance a director's ability to perform his
or her duties.
- Directors will have complete access to Company
management and the Company's independent auditors.
- The Board, as necessary and appropriate, may contact
and retain independent advisors to assist the Board in carrying out its
duties and responsibilities.
- Director Compensation; Stock Ownership Guidelines
- The Compensation Committee will periodically review
and make recommendations to the Board with respect to both cash and
equity compensation for directors. The full Board will make final
decisions on director compensation.
- The Board believes the Company’s directors and
executive officers should have a meaningful stake in the ownership of
the Company in order to align their interests with those of
shareholders. To further that objective, the Board has adopted minimum
stock ownership guidelines to be met within five years of initial appointment
or election. Guidelines, expressed as a multiple of annual Board cash
retainer or base salary, are as follows: Non-employee directors – 4x,
the Board’s Chair and Chief Executive Officer – 5x, Chief Operating
Officer, Executive Vice President, and Chief Financial Officer – 3x,
all other Executive Officers – 2x. Shares owned outright, restricted
stock, stock units, and the net shares acquirable upon the exercise of
deferred compensation stock options are included in the ownership
calculation. A director or executive officer is required to hold the
net shares acquired upon the exercise of stock options or vesting of
restricted stock unless or until the ownership guideline is met. Any
shares pledged as security shall not be counted toward satisfying the ownership
guidelines, and the Company’s directors and executive officers shall
not enter into any pledge transactions after February 28, 2013.
- Meetings of Independent Directors
- The Company’s independent directors will meet in
executive session on a regular basis in connection with the Board’s
regular meetings to discuss any matters they deem appropriate. The Lead
Director may call a special executive session of the independent
directors upon notice to the full Board. In addition, executive
sessions or meetings will be held from time to time with the CEO for
general discussion of relevant subjects.
- During such times as the Board’s Chair is an
independent director, the Chair will preside over meetings of
independent directors; otherwise, the Lead Director will preside over
the meetings. The Chair or Lead Director, as applicable, will report
the results of the deliberations or any recommendation from the meeting
to the full Board or, at the Chair’s or Lead Director’s discretion or
at the request of the independent directors, to the CEO.
- Function of Committees
- It is the general policy of the Company that all
major decisions be considered by the Board as a whole. Accordingly, the
committee structure of the Board is limited to those committees
considered to be basic to or required for the operation of a public
Company. Currently these committees are the Executive Committee, Audit
Committee, Compensation Committee and Nominating & Corporate
- The Audit Committee, Compensation Committee and
Nominating & Corporate Governance Committee must be composed solely
of independent directors who also satisfy any additional independence
standards of the New York Stock Exchange and applicable securities laws
which are specific to the membership of those committees. The purpose
and responsibilities of each of these committees are outlined in
committee charters adopted by the Board. The Nominating & Corporate
Governance Committee, in consultation with the Chair, the CEO and the
Lead Director, will make recommendations to the full Board on committee
membership and committee chairmen.
- The committee chairs, in consultation with committee
members and appropriate members of management, will determine the
frequency, length and agenda of committee meetings. The meeting schedule
will allow sufficient time to consider the agenda items. Committee
materials will be delivered to members sufficiently in advance of a
meeting to allow them time to prepare for the meeting.
- The committee chairs will report to the full Board
regarding meetings and any significant actions taken.
- Code of Business Conduct and Ethics
- The Board believes that the Company should maintain
a Code of Business Conduct and Ethics (the "Code") to
focus on areas of ethical risk, provide guidance to personnel to help
them recognize and deal with ethical issues, provide mechanisms to
report unethical conduct, and to foster a culture of honesty and
- The Code should apply to directors, officers, and
employees and should cover the following topics: (i)
conflicts of interest, (ii) corporate opportunities, (iii)
confidentiality, (iv) fair dealing, (v)
protection and proper use of Company assets, (vi) compliance with laws,
rules and regulations, and (vii) such other matters as the Board deems
appropriate. The Code should also encourage the prompt reporting of
unethical or illegal behavior.
- Any waiver of the Code for executive officers or
directors must be made by the full Board or a Board committee based on
full information and promptly disclosed to shareholders.
- The Board believes the Company should not engage
professional services from firms with which an independent director is
- Transactions Between the Company and Related Persons
- The Board believes that certain Interested
Transactions with Related Persons, as those terms are defined below,
should be reviewed and approved or ratified by the Nominating &
Corporate Governance Committee unless the transaction is compensatory
in nature, in which case the Compensation Committee will fulfill this function.
If a director serving on the Committee is a Related Person in an
Interested Transaction under consideration, that director will recuse
himself or herself from the review and decision.
- A "Related Person" is: (i) a person who has served as an executive officer,
director or director nominee of the Company at any time since the
beginning of the last fiscal year; (ii) a shareholder beneficially
owning in excess of 5% of any class of the Company's voting securities;
(iii) an immediate family member of any person described in clause (i) or (ii);or (iv) an entity in which any of the
foregoing persons has, or will have, a direct or indirect material
interest. An "immediate family member" is any child,
stepchild, parent, stepparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law and any other person (other than a tenant or employee)
sharing the household of the executive officer, director or director
- An "Interested Transaction" is any
transaction, arrangement or relationship, or series of similar
transactions, involving an amount that exceeds or is expected to exceed
$120,000 in the aggregate, in which the Company or its subsidiaries
was, is, or will be a participant and in which a Related Person had,
has, or will have a direct or indirect material interest, and the
transaction, arrangement or relationship is not specifically excluded
from the disclosure requirements of Item 404(a) of Regulation S-K.
- The Company's executive officers and directors are
expected to notify the Company's Corporate Secretary or Deputy
Corporate Secretary of any current or proposed transaction that may be
an Interested Transaction and disclose all material information
regarding such transaction. The Corporate Secretary will determine if
it is an Interested Transaction and, if so, will include it for
consideration at the next meeting of the appropriate Committee.
- Approval should be obtained in advance of an
Interested Transaction whenever practicable. If it becomes necessary to
approve an Interested Transaction between meetings, the Chair of the
Committee is authorized to act on behalf of the Committee. The Chair
will provide a report on the matter to the full Committee at its next
- Although the Nominating & Corporate Governance
Committee may review any transaction with a Related Person, the
following Interested Transactions are specifically pre-approved and no
further action need be taken:
Standing Pre-Approval for Certain Interested Transactions
- Employment of executive officers. Any employment by the Company of an executive
officer of the Company if:
Director Compensation. Any compensation paid to a director if the
compensation is required to be reported in the Company's proxy
statement under Item 402(k) of the SEC's compensation disclosure
requirements and is approved by the Board of Directors.
Approved Contracts. Transactions in fulfillment of contractual
obligations where the contract or arrangement was previously approved
by the Board or a committee of the Board.
Certain transactions with other companies. Any transaction with another company at which a
Related Person's only relationship is as an employee (other than an
executive officer), director or beneficial owner of less than 10% of
that company's shares, if the aggregate amount involved over any
12-month period does not exceed the greater of $1,000,000, or 2% of
that company's total annual revenues.
Certain Company charitable contributions. Any charitable contribution, grant, or endowment
by the Company to a charitable organization, foundation or university
at which a Related Person's only relationship is as an employee (other
than an executive officer) or a director, if the aggregate amount
involved does not exceed the greater of $1,000,000, or 2% of the
charitable organization's total annual receipts.
Generally Available Terms. Transactions available to all employees generally
and conducted on similar terms.
Transactions where all shareholders receive
Any transaction where the Related Person's interest arises solely from
the ownership of the Company's common stock and all holders of the
Company's common stock received the same benefit on a pro rata basis
Transactions involving competitive bids. Any transaction involving a Related Person where
the rates or charges involved are determined by competitive bids.
Regulated Transactions. Any transaction with a Related Person involving
the rendering of services as a common or contract carrier, or public
utility, at rates or charges fixed in conformity with law or
Certain bank-related services. Any transactions with a Related Person involving
services as a bank depository of funds, transfer agent, registrar,
trustee under a trust indenture or similar services.
Ordinary Employee Arrangements. Employee compensatory arrangements, other than
executive officers, established in the ordinary course of business.
Board Approved Transaction. Any transaction, contract or arrangement approved
by the Board of Directors.
No approval or ratification of an Interested
Transaction will be deemed to satisfy or supersede the requirements of
the Company's Code of Business Conduct & Ethics, Business Policies
Manual, Articles of Incorporation or Bylaws.
Periodic Review and Evaluation
- The related compensation is required to be
reported in the Company's proxy statement under Item 402 of the
Securities and Exchange Commission's ("SEC's")
compensation disclosure requirements (generally applicable to
"named executive officers"); or
- The compensation is paid to an executive officer
who is not required to be named in the Summary Compensation Table if
the Compensation Committee has approved the compensation arrangement.
- The Board will conduct an annual self-evaluation to
determine whether it and its committees are functioning effectively.
This evaluation will focus on the performance of the Board as a whole,
concentrating on areas where performance might be improved. The
Nominating & Corporate Governance Committee will assist the Board
in conducting the evaluation.
- The Board and/or the Nominating & Corporate
Governance Committee will review these Corporate Governance Guidelines
from time to time. Any amendment or modification to these Guidelines
must be approved by the full Board.