GOVERNANCE COMMITTEE CHARTER
This Governance Committee Charter was adopted by the Board of Directors (the "Board") of Pathmark Stores, Inc. (the "Company") on April 16, 2004.
The purpose of the Governance Committee (the "Committee") is to assist the Board of Directors (the "Board") of the Company with the Board's responsibilities regarding:
the identification of individuals qualified to become Board members;
the selection of, or recommendation that the Board select, the director nominees for the next annual meeting of stockholders;
the selection of, or recommendation that the Board select, director candidates to fill any vacancies on the Board; and
the development and recommendation to the Board of a set of corporate governance guidelines and principles applicable to the Company (the "Corporate Governance Guidelines"); and
the evaluation and making of recommendations regarding compensation of the Company's directors.
In so doing, the Committee will endeavor to maintain free and open means of communication between the members of the Committee, other members of the Board, and management of the Company.
In addition to the powers and responsibilities expressly delegated to the Committee in this Charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Company's Bylaws. The powers and responsibilities delegated by the Board to the Committee in this Charter or otherwise shall be exercised and carried out by the Committee as it deems appropriate, without requirement of Board approval, and any decision made by the Committee (including any decision to exercise or refrain from exercising any of the powers delegated to the Committee hereunder) shall be at the Committee's sole discretion. While acting within the scope of the powers and responsibilities delegated to it, the Committee shall have and may exercise all the powers and authority of the Board. To the fullest extent permitted by law, the Committee shall have the power to determine which matters are within the scope of the powers and responsibilities delegated to it.
II. Committee Composition
a. Members. The Committee will consist of two (2) or more directors (the exact number to be determined from time to time by the Board) each of whom, in the business judgment of the Board, has experience that would be valuable in providing broad direction to the Board on matters related to corporate governance. The Committee members will be appointed annually by action of the Board upon the recommendation of the Committee and shall serve at the discretion of the Board. Nominees for the Committee must be selected, or recommended for selection by the Board, by (i) a majority of independent directors, or (ii) the Committee so long as it consists solely of independent directors.
b. Qualifications. Each
member of the Committee also will satisfy the "
c. Chair. The Chair of the Committee will be appointed by the Board.
d. Removal and Replacement. The members of the Committee may be removed or replaced, and any vacancies on the Committee shall be filled, by the Board upon the recommendation of the Committee.
III. Committee Operations
a. Meetings. The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings so long as they are not inconsistent with any provisions of the Company's Bylaws that are applicable to the Committee. The Chair (or in his or her absence, a member designated by the Chair) shall preside at each meeting of the Committee and set the agendas for Committee meetings.
b. Agenda. The Chair of the Committee shall develop and set the Committee's agenda in consultation with other members of the Committee, the Board and management. The agenda and information concerning the business to be conducted at each Committee meeting shall, to the extent practical, be communicated to the members of the Committee sufficiently in advance of each meeting to permit meaningful review.
c. Reports to Board. The Committee shall report periodically, but no less than once annually, to the Board and shall submit to the Board the minutes of its meetings.
d. Attendance by Management and Non-Management Directors. All non-management directors that are not members of the Committee may attend and observe meetings of the Committee but may not vote and shall not participate in any discussion or deliberation unless invited to do so by the Committee. The Committee may, at its discretion, include in its meetings members of the Company's management, representatives of the independent auditor, the internal auditor, or any other personnel employed or retained by the Company, or any other persons whose presence the Committee believes to be necessary or appropriate. Notwithstanding the foregoing, the Committee may also exclude from its meetings any persons it deems appropriate, including, but not limited to, any director who is not a member of the Committee.
IV. Authority and Duties
The goals and responsibilities of the Committee are to:
assist in the recruiting of directors, including evaluation of executives recruited or promoted to positions eligible for Board membership;
recommend to the Board (as soon as is reasonably practicable after a vacancy arises or a director advises the Board of his or her intention to resign) new directors for election annually by the stockholders and otherwise by appointment by the Board to fill vacancies, in compliance with the selection criteria outlined below;
annually review the suitability for continued service of individual directors and evaluate the slate of nominees for re-election as directors;
consider potential nominees for membership on the Board submitted by stockholders in accordance with the notice provisions and procedures set forth in the Bylaws of the Company;
annually review and make recommendations to the Board regarding director compensation and benefits;
review and make recommendations to the Board with regard to the membership composition of the Board committees, including the size of the Board and Board committees;
review, upon a significant change in a director's principal occupation, the continued Board membership of such director;
identify and recommend to the Board the names of directors to serve as members of the Board or any Board committee;
review and oversee any orientation programs for newly elected members of the Board and continuing director education programs and assist the Board in implementing any such programs;
determine the authority of the Committee and the other Board committees to form and delegate authority to subcommittees;
review and approve non-Board services, if any, provided by directors to the Company and its subsidiaries;
review periodically with the Chairman of the Board and the Chief Executive Officer the succession plans relating to positions held by executive officers;
develop and recommend to the Board the Corporate Governance Guidelines;
make recommendations to the Board regarding matters, including, but not limited to, the Company's Certificate of Incorporation, Bylaws, this Charter, the charters of the Company's other committees, and the Company's Corporate Governance Guidelines;
advise the Board periodically with respect to significant developments in the law and practice of corporate governance as well as the Company's compliance with applicable laws and regulations, and make recommendations to the Board on all matters of corporate governance and on any corrective action to be taken, as the Committee may deem appropriate; and
discuss internally interpretations of the Nasdaq rules that the Committee and the Board make.
The foregoing list of duties is not exhaustive, and the Committee may, in addition, perform such other functions as may be necessary or appropriate for the performance of its duties. The Committee shall have the power to delegate its authority and duties to subcommittees or individual members of the Committee as it deems appropriate.
V. Board Member Criteria
In order to be deemed "independent", non-employee Board member candidates must meet the independence requirements of the Nasdaq and any other applicable rules.
The Committee may also consider the following criteria in recommending candidates for election to the Board:
experience in corporate governance, such as experience as an officer or former officer of a publicly held company;
experience in financial services companies, such as banks, investment banks or insurance companies;
experience in the Company's industry;
experience as a business consultant;
experience as a board member of another publicly held company;
experience in public accounting, law or consulting with a major firm;
academic expertise in an area of the Company's operations;
demonstrated interest in, and an understanding of, business;
time available for Board service; and
other criteria deemed relevant by the Committee.
The Committee will consider director candidates recommended by stockholders of the Company. Stockholders may recommend an individual for consideration by submitting to the Committee the name of the individual, his or her background (including education and employment history), a statement of the particular skills and expertise that the candidate would bring to the Board, the name, address and number of shares of the Company owned by the stockholder submitting the recommendation, any relationship or interest between such stockholder and the proposed candidate, and any additional information that would be required under applicable SEC rules to be included in the Company's Proxy Statement if such proposed candidate were to be nominated as a director.
Such submissions should be addressed to the Company's Governance Committee, at the Company's headquarters address, in care of the Corporate Secretary. In order for a candidate to be considered for any annual meeting, the submission must be received by the Committee no later than the December 1st preceding such annual meeting.
The Committee will evaluate the biographical information and background material relating to each potential candidate and may seek additional information from the submitting stockholder, the potential candidate, and/or other sources. The Committee may hold interviews with selected candidates. Individuals recommended by stockholders will be considered under the same factors as individuals recommended by other sources.
VI. Committee Member Criteria
Each individual nominated to a Board committee will satisfy the following qualifications:
members of the chartered committees must meet the independence requirements of the Nasdaq and any other applicable rules.
members of each chartered committee must satisfy the selection criteria specified in its respective charter and, in the business judgment of the Committee and the entire Board, have experience that would be valuable in providing broad direction to the Board on matters related to the committee on which they serve.
VII. External Advisors and Committee Resources
The Committee shall have the sole authority, as it deems appropriate, to retain and/or replace, as needed, any external legal, accounting or other experts or advisors that the Committee believes to be necessary or appropriate. The Committee may also utilize the services of the Company's regular legal counsel or other advisors to the Company. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to any such persons retained by the Committee. The Committee shall have sole authority to retain and terminate any search firm to be used to identify director candidates, including sole authority to approve such search firm's fees and other retention terms.
VIII. Disclosure of Charter
This Charter will be made available to any stockholder who otherwise requests a copy. The Company's Annual Report to Stockholders or Proxy Statement shall state the foregoing.