The purposes and responsibilities of the Corporate Governance and Nominating Committee of the Board of Directors (the “Committee”) of Reynolds American Inc. (“RAI”) shall be to:
1. Identify individuals qualified to become members of the Board of Directors, consistent with criteria approved by the Board of Directors;
2. recommend candidates to fill vacancies and newly created director positions on the Board of Directors;
3. recommend whether incumbent directors should be nominated for re-election to the Board of Directors upon expiration of their terms;
4. recommend candidates to serve as members and the chairs of the committees of the Board of Directors;
5. develop and recommend corporate governance guidelines applicable to RAI and its subsidiaries; and
6. oversee the evaluation of the Board of Directors and management.
Number. The Committee shall consist of no fewer than three members, the exact number of which will be determined from time to time by the Board of Directors.
Qualifications. Each Committee member shall meet the independence criteria of the rules of the New York Stock Exchange, Inc., as such requirements are interpreted by the Board of Directors in its business judgment and as set forth in RAI’s Current Board of Directors Practices on Certain Corporate Governance Issues.
Appointment and Removal. The Board of Directors will appoint the members and the Chair of the Committee based on nominations made by the Committee. Each Committee member shall serve at the pleasure of the Board of Directors for such term or terms as the Board of Directors may determine or until such Committee member is no longer a member of the Board of Directors.
The Committee shall have the following specific powers, duties and responsibilities:
1. hold such regular meetings as may be necessary and such special meetings as may be called by the Chair of the Committee or at the request of management;
2. create an agenda for the work of the Committee for the ensuing year;
3. review the qualifications of candidates for nomination to the Board of Directors and Committees of the Board of Directors (whether by members of the Board of Directors, management, stockholders or any other person and whether for nomination, re-election or appointment to fill a vacancy); and review and evaluate any stockholder proposals relating to the nomination by stockholders of any candidates to the Board of Directors or the right of any stockholder to do so. In recommending candidates, the Committee shall consider such factors as it deems appropriate, consistent with the factors in RAI’s corporate governance guidelines. These factors may include judgment, skill, diversity, integrity, experience with businesses and other organizations of comparable size, the interplay of the candidate’s experience with the experience of other Board members and the extent to which the candidate would be a desirable addition to the Board of Directors and any committee of the Board of Directors;
4. recommend to the Board of Directors nominees for election as directors;
5. review the appropriateness of continued service on the Board of Directors of members whose circumstances, including business or professional affiliations or responsibilities, have changed or who have accepted a directorship on another public company board or an appointment to an audit or compensation committee of another public company board. In reviewing the appropriateness of a member’s continued service of the Board of Directors after such member’s acceptance of a directorship on another public company board or an appointment to an audit or compensation committee of another public company board, the Committee shall consider the time commitment required by such new position, and whether such appointment would cause a compensation committee interlock or participation on more than three public company audit committees;
6. establish and oversee the orientation process for newly elected members of the Board of Directors and assist the Board of Directors in its implementation;
7. regularly assess the adequacy of and need for additional continuing director education programs;
8. evaluate and recommend the processes and practices through which the Board of Directors shall conduct its business, including (a) the structure, charter and membership of committees of the Board of Directors, and (b) committee member qualifications, appointment and removal;
9. periodically review and recommend to the Board of Directors the form and amount of director compensation (including perquisites and other benefits), and any additional compensation to be paid for service on committees of the Board of Directors or for service as chair of a committee. In making its recommendations, the Committee shall give due consideration to what is customary compensation for directors of comparable companies and any other factors it deems appropriate that are consistent with the policies and principles set forth in this Charter and RAI's Corporate Governance Guidelines;
10. administer, interpret, amend or terminate all plans or programs relating to director equity and benefit plans, including but not limited to the Equity Incentive Award Plan for Directors of Reynolds American Inc. and Subsidiaries and the Deferred Compensation Plan for Directors of Reynolds American Inc., and establish and oversee compliance with director equity ownership guidelines;
11. initiate and oversee annually an appraisal of the performance of the Board of Directors in meeting its corporate governance responsibilities;
12. review and evaluate annually the assignment of the various oversight responsibilities and activities of the committees of the Board of Directors and the structure and operations of such committees (including authority to delegate to subcommittees);
13. review RAI’s corporate governance policies, consider the adequacy of such policies in response to stockholder concerns and make recommendations to the entire Board of Directors with respect to such policies;
14. report through its Chair to the Board of Directors following the meetings of the Committee;
15. maintain minutes or other records of meetings and activities of the Committee; and
16. perform any other duties or responsibilities delegated to the Committee by the Board of Directors from time to time.
The Committee may, in its discretion, delegate such of its powers, duties and responsibilities as it deems appropriate to subcommittees it establishes.
The Committee shall meet in person or telephonically as frequently as necessary to comply with its responsibilities as set forth in this Charter. The Chair of the Committee shall, in consultation with the other members of the Committee and appropriate officers of RAI, be responsible for calling meetings of the Committee, establishing agendas therefore and supervising the conduct thereof. A majority of the number of Committee members will constitute a quorum for conducting business at a meeting of the Committee. The act of a majority of the Committee members present at a Committee meeting at which a quorum is in attendance will be the act of the Committee, unless a greater number is required by law or by RAI’s Articles of Incorporation or By-Laws. The Committee also may take any action permitted under this Charter by unanimous written consent.
The Committee may request any officer or employee of RAI or its subsidiaries, or RAI’s outside legal counsel or other advisors, to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.
The Committee shall have appropriate resources and authority to discharge its responsibilities, including, without limitation, appropriate funding, in such amounts as the Committee deems necessary, to compensate any consultants or any other advisors retained by the Committee. The Committee shall have the sole authority to retain and terminate any search firm to be used to identify director candidates and the sole authority to approve the fees and other retention terms of such search firms. The Committee also shall have the authority to use the compensation consultants retained by the Compensation Committee of the Board of Directors to assist it in the evaluation of director compensation and may retain independent legal counsel and other independent advisors to assist it in carrying out its responsibilities.
The Committee shall conduct and review with the Board of Directors annually an evaluation of this Charter and recommend any changes to the Board of Directors. The Committee may conduct this Charter evaluation in such manner as the Committee, in its business judgment, deems appropriate.
The Committee shall conduct and review with the Board of Directors annually an evaluation of the Committee’s performance with respect to the requirements of this Charter. This evaluation also shall set forth the goals and objectives of the Committee for the upcoming year. The Committee may conduct this performance evaluation in such manner as the Committee, in its business judgment, deems appropriate.