CORPORATE GOVERNANCE GUIDELINES
A majority of the Board of Directors (the “Board”) must consist of “independent” directors and no more than two employees of the Company or any of its subsidiaries may serve as directors at any one time. A director is independent if the Board has made an affirmative determination that such director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). In addition, in accordance with the currently applicable New York Stock Exchange rules, a director is not independent if:
The director is, or has been within the last three years, an employee of the Company, or an immediate family member is, or has been within the last three years, an executive officer of the Company.
The director has received, or has an immediate family member who has received for service as an executive officer, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the Company (other than fees in connection with services as director or other non-contingent deferred compensation for prior service).
(A) The director is a current partner or employee of a firm that is the Company’s internal or external auditor; (B) the director has an immediate family member who is a current partner of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and personally works on the Company’s audit; or (D) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the Company’s audit within that time.
The director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee.
The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of the other company’s consolidated gross revenues.
In addition, no director shall be independent unless he or she shall meet the requirements for independence under applicable securities laws.
For purposes of determining independence, the “Company” includes any parent or subsidiary in a consolidated group with the Company.
Any director who is also an officer of the Company shall automatically cease to be a director of the Company, effective as of his or her date of termination of employment from the Company, with the exception of any corporate officer holding, or who has held the position of, Chief Executive Officer.
The Board will consider the desirability of the continued service of directors who change their primary employment. Such directors shall tender their resignation in such circumstance to assist the Board in evaluating such desirability on a timely basis.
The Board shall be comprised of 9 directors.
A Chairman of the Board shall be elected by the Board from among its members to preside at all meetings of the Board.
The Nominating and Corporate Governance Committee shall recommend to the Board criteria for the selection of directors and periodically review the criteria adopted by the Board.
The Board selects new director candidates based on the recommendations of the Nominating and Corporate Governance Committee.
There are no established term limits for service on the Board.
There is no mandatory retirement age for service on the Board.
The Board is responsible for exercising the corporate powers of the Company and directing the management of the business and affairs of the Company. Directors shall act in the best interests of the Company and its shareholders.
In discharging his or her duties to the Company and in determining what he or she believes to be in the best interests of the Company, a director may, in addition to considering the effects of any action on shareholders, consider the following:
(1) The effects of the action on employees, suppliers and customers of the Company.
(2) The effects of the action on communities in which the Company operates.
(3) Any other factors that the director considers pertinent.
Unless the director has knowledge that makes reliance unwarranted, a director, in discharging his or her duties to the Company, may rely on information, opinions, reports or statements, whether written or oral, formal or informal, if prepared or presented by any of the following:
(1) An officer or employee of the Company whom the director believes in good faith to be reliable and competent in the matters presented.
(2) Legal counsel, certified public accountants or other persons as to matters that the director believes in good faith are within the person's professional or expert competence.
(3) A committee of the Board of which the director is not a member if the director believes in good faith that the committee merits confidence.
Directors are expected to regularly attend meetings of the Board and the committees of which they are members. In addition, each director is expected to attend the annual meeting of shareholders.
The Chairman establishes the agenda for each Board meeting. Individual Board members may suggest agenda items.
Materials pertaining to Board and committee meetings are distributed in advance of those meetings. A director is expected to review all distributed materials prior to any Board or committee meeting that such director attends.
The non-management directors will meet at regularly scheduled executive sessions without management not less frequently than three times per year. In addition, if at any time there is a non-management director who is not an independent director, all independent directors will meet at least once a year in an executive session without management. One director shall act as the chairperson of each such meeting. The responsibility for presiding at each meeting of independent directors will be rotated among all independent members of the Board of Directors in alphabetical order.
There are currently six Board committees: Executive, Audit, Compensation and Development, Finance, Nominating and Corporate Governance and Scientific Advisory. The Board may from time to time establish other committees, including standing or special committees, subject to the By-laws and Wisconsin Business Corporation Law. The Board may, by resolution, at any time deemed desirable, discontinue any standing or special committee, subject to the requirements of the By-laws, applicable law and stock exchange requirements.
Committee assignments are made by the Board based upon recommendations of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee and the Board periodically will evaluate whether the chairmanship of key committees (including without limitation the Audit Committee, the Compensation and Development Committee, the Finance Committee and the Nominating and Corporate Governance Committee) should be rotated.
Each committee shall establish its own rules or procedures, which shall include and be consistent with the provisions of the Wisconsin Business Corporation Law, the By-laws and any resolutions of the Board governing such committee. Each committee shall meet as provided by such rules and shall also meet at the call of its chairman or any two members of such committee.
The chairman of each committee will determine the committee’s agenda prior to a meeting, giving consideration to management recommendations.
Subject to the limitations set forth in the By-Laws and Wisconsin Business Corporation Law, the Executive Committee shall be responsible for the management and conduct of the business and affairs of the Company in the intervals between meetings of the Board, and shall report its actions to the Board at its regular meetings.
The Committee’s duties and responsibilities are set forth in the Audit Committee Charter, which is included in the By-laws, and include all of the responsibilities of an audit committee under the New York Stock Exchange rules and such other matters as may from time to time be delegated to the Committee by the Board.
The Committee’s duties and responsibilities are set forth in the Compensation and Development Committee Charter, which is included in the By-laws, and include all of the responsibilities of a compensation committee under the New York Stock Exchange rules and such other matters as may from time to time be delegated to the Committee by the Board.
The Committee’s primary responsibilities include (i) reviewing and approving the Company’s annual capital budget, long-term financing plans, borrowings, notes and credit facilities, investments and commercial and investment banking relationships; (ii) reviewing and approving the Company’s existing insurance coverage, foreign currency management and Stock Repurchase Program; (iii) reviewing and approving the financial management and administrative operation of the Company’s qualified and non-qualified employee benefit plans; and (iv) and handling such other matters as may from time to time be delegated to the Committee by the Board or as provided in the By-Laws.
The Committee’s duties and responsibilities are set forth in the Nominating and Corporate Governance Committee Charter, which is included in the By-laws, and include all of the responsibilities of a nominating committee under the New York Stock Exchange rules and such other matters as may from time to time be delegated to the Committee by the Board.
The Committee’s primary responsibilities include (i) reviewing and evaluating the research and development programs of the Company with respect to quality and scope; (ii) advising the Board on maintaining product leadership through technological innovation; (iii) reviewing and making recommendations to the Board regarding technological aspects of the Company’s business, including new business opportunities; (iv) reporting to the Board on new technological and regulatory trends that will have a significant impact on the business of the Company; (v) and handling such other duties as may be delegated to it from time to time by the Board.
Directors have complete access to management and employees of the Company; however, independent directors are expected to keep the Chief Executive Officer informed of such contacts. The Board encourages the attendance of officers other than executive officers at Board meetings when matters within their areas of responsibility are discussed.
Directors have complete access, as necessary and appropriate, to the Company’s outside advisors it deems necessary and appropriate. If appropriate, directors may retain independent legal, financial or other advisors.
All directors of the Company who are not simultaneously employed as officers by the Company shall be properly compensated and reimbursed for their services as a director. Any employee of the Company who is elected a director of the Company shall not receive any compensation, expense reimbursement or participation in director benefit programs for his or her services as a director of the Company. A Company employee who retires from the Company while serving as a director immediately becomes eligible for compensation, expense reimbursement and director benefit program participation as a non-employee director unless alternative compensation arrangements are mutually approved by the Board and the retiring employee, effective as of the individual’s retirement date from the Company.
The Board is responsible for setting director compensation. The Nominating and Corporate Governance Committee shall periodically review the compensation of the Company’s directors and make recommendations to the Board with respect thereto based on the criteria set forth in the Nominating and Corporate Governance Committee Charter. Directors fees and emoluments should not exceed what is customary for a company of the size and stature of the Company. In making such compensation determinations, the Board and the Nominating and Corporate Governance Committee shall consider and critically evaluate the questions as to directors’ independence that may be raised if the Company makes substantial charitable contributions to organizations in which a director is affiliated, or enters into consulting contracts with (or provides other indirect forms of compensation to) a director.
All new directors elected to the Board will be provided with a package of written materials detailing information about the Company’s business and operations, its financial condition, its policies and procedures, its principal officers, internal and independent auditors, and the duties and responsibilities of directors. Senior management will make itself available to new directors to help familiarize the directors with these issues. In addition, management will make presentations from time to time as necessary to ensure that the Board is aware of all business, legal and other developments relating to such matters.
The Board conducts an annual self-evaluation in order to determine whether it and its committees are functioning effectively. The Nominating and Corporate Governance Committee oversees the Board’s annual self-evaluation.
The Chief Executive Officer and, as appropriate, designated members of senior management speak for the Company. Individual directors may, on occasion and with the knowledge of management, meet or otherwise communicate with interested parties. Absent unusual circumstances or as contemplated by the Committee charters, such communications shall be made only at the request of management.
Interested parties who wish to make their concerns known by communicating directly with the presiding independent director or with the independent directors as a group may do so in writing addressed to the attention of the Company Secretary. The Secretary will review and record the receipt of any such communications and, unless he or she determines that the content is obviously inappropriate for Board review, forward the communication to the appropriate Board member(s).