Nominating and Corporate Governance Committee Charter

 

 

PURPOSE

 

The Nominating and Corporate Governance Committee (the “Committee”) of Foundation Coal Holdings, Inc. (the “corporation”) shall provide assistance to the Board of Directors in fulfilling its responsibility to the stockholders and investment community by:

 

Identifying individuals qualified to become directors and selecting, or recommending Board of Directors select, the candidates for all directorships to be filled by the Directors or by the stockholders and directing the evaluation of such individuals;

 

Recommending members of the Board of Directors to serve on the committees of the Board of Directors and monitoring and making recommendations regarding committee purpose, structure and operations;

 

Developing and recommending to the Board of Directors a set of corporate governance practices and policies applicable to the corporation;

 

Overseeing and approving a management continuity planning process;

 

Regularly reporting to the Board of Directors; and

 

Otherwise taking a leadership role in shaping the corporate governance of the corporatio

 

STRUCTURE AND OPERATIONS

 

Composition and Qualifications

 

The Committee shall be comprised of three or more members of the Board of Directors. At such time that the corporation no longer relies on the “controlled company” exception to the New York Stock Exchange corporate governance standards, and after any allowable phase-in period, each of the members of the Committee shall be determined by the Board of Directors to be “independent” in accordance with the rules of the New York Stock Exchange.

 

Appointment and Removal

 

The members of the Committee shall be appointed by the Board of Directors and shall serve until such member’s successor is duly elected and qualified or until such member’s earlier resignation, retirement, removal from office or death. The members of the Committee may be removed, with or without cause, by a majority vote of the Board of Directors.

 

Chairman

 

Unless a Chairman is elected by the full Board of Directors, the members of the Committee shall designate a Chairman by majority vote of the full Committee membership. The Chairman will chair all regular sessions of the Committee and set the agendas for Committee meetings.

 

Delegation to Subcommittees

 

In fulfilling its responsibilities, the Committee shall be entitled to delegate any or all of its responsibilities to a subcommittee of the Committee.

 

MEETINGS

 

The Committee shall meet as often as its members deem necessary to fulfill the Committee’s responsibilities. The Chairman of the Board of Directors or any member of the Committee may call meetings of the Committee in each case on at least twenty-four hours notice to each Committee member. When necessary, the Committee may meet in executive session without any officers present.

 

All meetings of the Committee may be held by telephone or similar communications equipment by means of which all persons participating in the proceedings can hear each other, and such participation shall constitute presence in person at such proceedings. A majority of the Committee members shall constitute a quorum for the transaction of the Committee’s business. The Committee shall act upon the vote of a majority of its members at a duly called meeting at which a quorum is present. Any action of the Committee may be taken by a written instrument signed by all of the members of the Committee. Meetings of the Committee may be held at such place or places as the Committee shall determine or as may be specified or fixed in the respective notice or waiver of notice for a meeting.

 

All non-management directors that are not members of the Committee may attend meetings of the Committee but may not vote. Additionally, the Committee may invite to its meetings any director, management member of the corporation and such other persons as it deems appropriate in order to carry out its responsibilities. The Committee may also exclude from its meetings any persons it deems appropriate in order to carry out its responsibilities.

 

RESPONSIBILITIES AND DUTIES

 

The following functions shall be the common recurring activities of the Committee in carrying out its responsibilities outlined in Section I of this Charter. These functions should serve as a guide with the understanding that the Committee may carry out additional or substitute functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal or other conditions. The Committee shall also carry out any other responsibilities and duties delegated to it by the Board of Directors from time to time related to the purposes of the Committee outlined in Section I of this Charter.

 

The Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern that the Committee deems appropriate and shall have the sole authority to retain and terminate outside counsel or other experts for this purpose, including the authority to approve the fees payable to such counsel or experts and any other terms of retention. The Committee also shall have sole authority to retain and to terminate any search firm to be used to assist it in identifying candidates to serve as directors of the corporation, including sole authority to approve the fees payable to such search firm and any other terms of retention. The corporation shall provide for appropriate funding for such counsel or experts retained by the Committee. Each member of the Committee, in the performance of such member’s duties, will be entitled to rely in good faith upon the information, opinions, reports or statements presented to the Committee by any of the corporation’s officers or employees or by any other person as to matters such member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the corporation.

 

Board Selection, Composition and Evaluation

 

Establish criteria for the selection of new directors to serve on the Board of Directors.

 

Identify individuals believed to be qualified as candidates to serve on the Board of Directors consistent with criteria approved by the Board of Directors and select, or recommend that the Board of Directors select, the candidates for all directorships to be filled by the Board of Directors or by the stockholders at an annual or special meeting. In identifying candidates for membership on the Board of Directors, the Committee and the Board shall take into account all factors it considers appropriate, which may include (a) the extent to which a proposed nominee would ensure that the Board of Directors, as a whole, is diverse and consists of individuals with various and relevant career experience, relevant technical skills, industry knowledge and experience, financial expertise (including expertise that could qualify a director as a “financial expert,” as that term is defined by the rules of the Securities and Exchange Commission), local or community ties, any actual or potential conflicts of interest posed by the proposed nominee’s election as a director, and the proposed nominee’s time available to devote to Board and committee activities and to enhance his or her knowledge of the corporation’s business and (b) personal qualifications, including strength of character, mature judgment, familiarity with the company's business and industry, independence of thought and an ability to work collegially. The Committee also may consider the extent to which the candidate would fill a present need on the Board of Directors.

 

Review and make recommendations to the full Board of Directors, or determine, whether members of the Board of Directors should stand for re-election. Consider matters relating to the retirement of members of the Board of Directors.

 

Evaluate prospective candidates for nomination to the Board of Directors, including those recommended by stockholders. In that connection, the Committee shall review and make recommendations to the full Board of Directors regarding procedures for the submission of recommendations by stockholders as it deems appropriate.

 

Conduct all necessary and appropriate inquiries into the backgrounds and qualifications of possible candidates.

 

Consider questions of independence and possible conflicts of interest of members of the Board of Directors and executive officers, and whether a candidate has special interests or a specific agenda that would impair his or her ability to effectively represent the interests of all stockholders.

 

Review and make recommendations, as the Committee deems appropriate, regarding the composition and size of the Board of Directors in order to ensure the Board of Directors has the requisite expertise and its membership consists of persons with sufficiently diverse and independent backgrounds.

 

Oversee evaluation of the Board of Directors and management as circumstances dictate.

 

Committee Selection, Composition and Evaluation

 

Recommend members of the Board of Directors to serve on the committees of the Board of Directors, giving consideration to the criteria for service on each committee as set forth in the charter for such committee, as well as to any other factors the Committee deems relevant, and where appropriate, make recommendations regarding the removal of any member of any committee.

 

Recommend members of the Board of Directors to serve as the Chair of the committees of the Board of Directors.

 

Establish, monitor and recommend the purpose, structure and operations of the various committees of the Board of Directors, the qualifications and criteria for membership on each committee of the Board of Directors, make recommendations regarding the authority to delegate responsibilities to subcommittees and, as circumstances dictate, make any recommendations regarding periodic rotation of directors among the committees, procedures governing committee member appointment and removal, and impose any term limitations of service on any committee of the Board of Directors.

 

Periodically review the charter, composition and performance of each committee of the Board of Directors and make recommendations to the Board of Directors for the creation of additional committees or the elimination of committees of the Board of Directors.

 

Receive comments from all directors regarding the self-evaluation of the Board of Directors and each committee of the Board of Directors and report annually to the Board with an assessment of the Board's performance.

 

Corporate Governance

 

Review the adequacy of the certificate of incorporation and by-laws of the corporation and recommend to the Board of Directors, as conditions dictate, that it propose amendments to the certificate of incorporation and, where appropriate, by-laws for consideration by the stockholders.

 

Develop and recommend to the Board of Directors a set of corporate governance practices and policies applicable to the corporation and keep abreast of developments with regard to corporate governance to enable the Committee to make recommendations to the Board of Directors in light of such developments as may be appropriate.

 

Review policies relating to meetings of the Board of Directors. This may include meeting schedules and locations, meeting agendas and procedures for delivery of materials in advance of meetings.

 

Continuity / Succession Planning Process

 

Oversee and approve the management continuity planning process. Review and evaluate the succession plans (both on a planned or emergency basis) relating to the Chief Executive Officer (“CEO”) and other executive officer positions and make recommendations to the Board of Directors with respect to the selection of individuals to occupy these positions.

 

Serve as a counseling committee to the CEO regarding matters of key personnel selection, compensation matters and such other related matters as the Board of Directors may from time to time direct.

 

Reports

 

Report regularly to the Board of Directors (i) following meetings of the Committee, (ii) with respect to such other matters as are relevant to the Committee’s discharge of its responsibilities and (iii) with respect to such recommendations as the Committee may deem appropriate. The report to the Board of Directors may take the form of an oral report by the Chairman or any other member of the Committee designated by the Committee to make such report.

 

Maintain minutes or other records of meetings and activities of the Committee.

 

ANNUAL PERFORMANCE EVALUATION

 

The Committee shall perform a review and evaluation, at least annually, of the performance of the Committee and its members, including by reviewing the compliance of the Committee with this Charter. In addition, the Committee shall review and reassess, at least annually, the powers of the Committee and the adequacy of this Charter and recommend to the Board of Directors any improvements to this Charter that the Committee considers necessary or valuable. The Committee shall conduct such evaluations and reviews in such manner as it deems appropriate.

 

UNDERSTANDING AS TO THE COMMITTEE’S ROLE

 

Management of the corporation is responsible for the day-to-day operation of the corporation’s business. As a result, the corporation’s officers and employees and other persons who may be engaged by the Committee may have more time, knowledge and detailed information about the corporation than do the Committee members. The Committee will review information, opinions, reports or statements presented to the Committee by the corporation’s officers or employees or other persons as to matters the Committee members reasonably believe are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the corporation. While the Committee has the responsibilities and powers set forth in this charter, each member of the Committee, in the performance of his or her duties, will be entitled to rely in good faith upon reports presented to the Committee by these experts. Accordingly, the Committee’s role does not provide any special assurances with regard to matters that are outside the Committee’s area of expertise or that are the traditional responsibility of management.