Corporate Governance Guidelines
The following shall constitute the Corporate Governance Guidelines (the “Corporate Governance Guidelines”) of the Board of Directors of NewMarket Corporation (the "Company").
The Company is committed to conducting its business in accordance with ethical business principles. Integrity and ethical behavior are core values of the Company. The Board of Directors of the Company (the “Board”) shall provide the best example of these values and shall reinforce their importance at appropriate times. The Nominating and Corporate Governance Committee of the Board (the “Nominating and Governance Committee”) shall review the Company’s Code of Ethics periodically, as well as the adequacy of the policies included in the Code of Ethics. The Nominating and Governance Committee shall confirm with Company’s executive officers periodically that the officers understand and are implementing those policies.
I. Board Composition and Structure
1. Independence Standards
The Board will satisfy any independence requirements of the New York Stock Exchange as then in effect. The Board shall make an annual affirmative determination as to the independence of each director following a recommendation by the Nominating and Governance Committee and a review of all relevant information. The Board has established categorical standards to assist it in making such determinations. Such standards are set forth in Annex A attached hereto.
2. Annual Election of Directors
The Company’s shareholders elect all directors annually. The Board recommends a slate of directors for election by shareholders at each Annual Meeting of Shareholders based on the recommendations of the Nominating and Governance Committee. Under the Bylaws, the Board generally may fill vacancies in existing or new director positions. Such directors elected by the Board shall serve only until the next Annual Meeting of Shareholders when they must stand for election by the shareholders.
3. Qualifications of Directors
The Nominating and Governance Committee shall review with the Board, on an annual basis, the skills and characteristics of new and current Board members, as well as the composition of the Board as a whole. This assessment will include members’ qualification as independent, as well as consideration of skills and experience in the context of the Company’s needs and the cohesiveness and effectiveness of the Board. The Nominating and Governance Committee will select nominees for directorship in accordance with the policies and principles in its charter. The invitation to join the Board should be extended by the Board itself, by the Chairman of the Nominating and Governance Committee and the Chairman of the Board.
4. Number of Directors
The Board presently has seven members. The Board believes that the range in the size of the Board from 5 to 12 is appropriate and most effective. The Board is willing to expand to a somewhat larger size, however, to accommodate the availability of an outstanding candidate.
5. Change in Principal Position
When a director no longer holds the principal position that he or she held when first elected to the Board, the Nominating and Governance Committee shall make a recommendation to the Board regarding the director’s continued service on the Board.
6. Service on Public Company Boards
No director may serve on more than four public company boards in addition to the Company unless approved by the Board upon recommendation of the Nominating and Governance Committee. Directors should advise the Chairman of the Board and the Chairman of the Nominating and Governance Committee in advance of accepting an invitation to serve on another public company board.
7. Term Limits
The Board does not believe it should establish term limits. Although term limits may help insure that there are fresh ideas and viewpoints available to the Board, they have the significant disadvantage of losing the contribution of directors who have been able to develop, over a period of time, increasing insight into the Company and its operations and, therefore, provide an increasing contribution to the Board as a whole. As an alternative to term limits, the Nominating and Governance Committee will review each director’s continued services on the Board every three years.
8. Lead Director
When the Chairman of the Board and Chief Executive Officer roles are combined, the independent directors shall designate an independent director to serve as Lead Director. The Lead Director shall:
• preside at all Board meetings at
which the Chairman of the Board is not present, including executive sessions of
the non-management directors and executive sessions of the independent
• serve as a liaison between the Chairman and the independent directors;
• have the authority to call meetings of the independent directors, as needed, and set agendas for executive sessions;
• approve Board meeting agendas and information sent to the Board;
• approve Board meeting schedules to
assure sufficient time for discussion of all agenda items; and
• be available for consultation and direct communication with major shareholders.
II. Director Responsibilities
1. Basic Responsibilities
The director’s basic responsibility is to exercise his or her good faith business judgment of the best interests of the Company. In fulfilling this responsibility directors shall:
• approve major corporate decisions
and oversee, develop and implement Board policies;
• periodically review (at least annually) the Company’s legal compliance programs and procedures;
• monitor and assess performance and ask appropriate questions of management to address accountability with established goals;
• stay well informed regarding the Company’s businesses (management is responsible for providing accurate information to Board members who should carefully review that information in advance of Board meetings);
• review and approve major capital allocation recommendations of management;
• through the Audit Committee, oversee financial statements;
• select, evaluate, terminate and, through the Compensation Committee and the Company’s independent directors, set the compensation of, the Chief Executive Officer;
• review and approve compensation of other executive officers through the Compensation Committee;
• establish proper governance, which includes a periodic review of the Corporate Governance Guidelines by the Nominating and Governance Committee, the consideration by such Committee of other corporate governance issues and related matters and any resulting recommendation by such Committee as to the governance issues that should be addressed by the Board;
• through the recruiting efforts of the Nominating and Governance Committee, recruit effective new members;
• be a partner with the Chief Executive Officer on strategic issues by advising and consulting;
• through the Audit Committee, oversee the Company’s disclosure controls and internal controls;
• oversee the Company’s program for identifying, evaluating and controlling significant risks; and
• be willing to be proactive in crisis situations.
Each director shall be entitled to rely on the honesty and integrity of the Company’s senior executives and its outside advisors and auditors absent evidence that makes such reliance unwarranted. The directors shall also be entitled (1) to have the Company purchase reasonable levels of directors’ and officers’ liability insurance on their behalf; (2) to the benefits of indemnification to the fullest extent permitted by law and the Company’s Articles of Incorporation, Bylaws and any indemnification agreements; and (3) to exculpation as provided by Virginia law and the Company’s Articles of Incorporation.
2. Board Meetings
The Board will meet at least quarterly per year. Directors are expected to attend all Board meetings and meetings of committees on which they serve, to spend the time needed and meet as frequently as necessary to discharge properly their responsibilities. Directors are also expected to attend the Annual Meeting of Shareholders.
The Secretary will distribute information and data that are important to the Board’s understanding of the business to be conducted at a Board or committee meeting in writing before the meeting. Directors should review these materials in advance of the meeting. In addition, the Secretary will distribute various materials to the Board on a continuing basis from time to time to keep the Board informed of developments concerning the Company, its businesses and the industries and markets in which the Company competes.
The Chairman will establish the agenda for each Board meeting. At the beginning of the year the Chairman will establish a schedule of significant agenda subjects to be discussed during the year (to the degree this can be foreseen). Each Board member is encouraged to suggest the inclusion of items on the agenda. Each Board member may raise at any Board meeting subjects that are not on the agenda for that meeting. The Board will review the Corporation’s long-term strategic plans and the principal issues that the Corporation will face in the future during at least one Board meeting each year.
5. Executive Session
The non-management directors will meet in executive session at each regularly scheduled meeting of the Board. An agenda for the executive session shall be distributed before each meeting of the Board of Directors with the opportunity provided for each Director to request additions to the agenda. The Lead Director, if there is one, shall chair these sessions. If there is no Lead Director, the chair shall rotate from meeting to meeting among the Chairman of the Compensation Committee, the Audit Committee and the Nominating and Governance Committee. This process of designating the chairman of each executive session will be disclosed in the annual proxy statement. The Company will also disclose in the proxy statement the method for interested parties to communicate directly with the Company’s non-management directors. The independent directors will meet in executive session at each regularly scheduled meeting of the Board. The Lead Director, if there is one, shall chair these sessions. If there is no Lead Director, the chair shall rotate from meeting to meeting among the Chairman of the Compensation Committee, the Audit Committee and the Nominating and Governance Committee.
6. Communications with the Public
The Board believes that the management speaks for the Company. Individual Board members may, from time to time, meet or otherwise communicate with various constituencies that are involved with the Company. It is expected that Board members will do this with the knowledge of the management and, absent unusual circumstances or as contemplated by the committee charters, only at the request of management.
7. Conflict of Interest
If a director develops an actual, apparent or potential conflict of interest, the director should report the matter immediately to the Nominating and Governance Committee for evaluation and appropriate resolution. If a director has a direct or indirect personal interest in a matter before the Board, the director shall disclose the interest to the full Board and withdraw from consideration of the matters. The matter shall not be approved unless it receives the affirmative vote of a majority of the directors or the appropriate committee who have no direct or indirect personal interest in the matter. At all times the director will conduct himself or herself in accordance with the Company’s Code of Business Conduct and Ethics.
III. Board Committees
The Board will have at all times an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. The members of these committees will comply with any requirements of the New York Stock Exchange and the Securities and Exchange Commission as then in effect. Committee members will be appointed by the Board upon recommendation of the Nominating and Governance Committee with consideration of the desires of individual directors. It is the sense of the Board that consideration should be given to rotating committee members periodically, but the Board does not feel that rotation should be mandated as a policy.
Each committee will have its own charter. The charters will set forth the purposes, goals and responsibilities of the committees as well as qualifications for committee membership, procedures for committee member appointment and removal, committee structure and operations and committee reporting to the Board. The charters will also provide that each committee will annually evaluate its performance.
The Chairman of each committee, in consultation with the committee members, will determine the frequency and length of the committee meetings consistent with any requirements set forth in the committee’s charter. The Chairman of each committee, in consultation with the appropriate members of the committee and management, will develop the committee’s agenda. At the beginning of the year each committee will establish a schedule of the principal agenda subjects to be discussed during the year (to the degree these can be foreseen).
The Board may, from time to time, establish or maintain additional committees as necessary or appropriate.
IV. Director Access to Officers and Employees
Directors have full and free access to officers and employees of the Company and, as necessary and appropriate, to the Company’s independent advisors. Any meetings or contacts that a director wishes to initiate may be arranged through the CEO or the Secretary or directly by the director. The directors will use their judgment to ensure that any such contact is not disruptive to the business operations of the Company and will, to the extent not inappropriate, copy the CEO on any written communications between a director and an officer or employee of the Company, or advise the CEO of any such oral communications.
The Board welcomes regular attendance at each Board meeting of the Company’s senior officers. If the CEO wishes to have additional Company personnel attend on a regular basis, this suggestion should be brought to the Board for approval.
V. Director Compensation
The form and amount of director compensation will be determined by the Board based on a recommendation of the Compensation Committee in accordance with the policies and principles set forth in its charter. The Compensation Committee will conduct an annual review of director compensation. The Compensation Committee will consider that directors’ independence may be jeopardized if director compensation and perquisites exceed customary levels, if the Company makes substantial charitable contributions to organizations with which a director is affiliated, or if the Company enters into consulting contracts with (or provides other indirect forms of compensation to) a director or an organization with which the director is affiliated.
VI. Director Orientation and Continuing Education
All new directors must participate in the Company’s Orientation Program, which shall be conducted within three months of the annual meeting at which new directors are elected. This orientation will include presentations by senior management to familiarize new directors with the Company’s strategic plans, its significant financial, accounting and risk management issues, its compliance programs, these Guidelines, its Code of Business Conduct and Ethics, its principal officers and its internal and independent auditors. In addition, the Orientation Program will include visits to Corporation headquarters and, to the extent practical, certain of the Corporation’s significant facilities. All other directors will also be invited to attend the Orientation Program.
VII. CEO Evaluation and Management Succession
The Compensation Committee will conduct an annual review of the CEO’s performance, as set forth in its charter. The Board of Directors will review the Compensation Committee’s report in order to ensure that the CEO is providing the best leadership for the Company in the long- and short-term.
The Board has no policy with respect to the separation of the offices of Chairman and the Chief Executive Officer. The Board believes that this issue is part of the succession planning process and that it is in the best interests of the Corporation for the Board to make a determination when it elects a new chief executive officer.
The Nominating and Governance Committee shall make an annual report to the Board on succession planning. The entire Board will work with the Nominating and Governance Committee to nominate and evaluate potential successors to the CEO. The CEO should at all times make available his or her recommendations and evaluations of potential successors, along with a review of any development plans recommended for such individuals. Any review of possible internal candidates should include:
2. demonstrated skills and competencies;
3. needed experience and training to fill gaps; and
4. a plan for adequate exposure to Board of Directors.
VIII. Annual Performance Evaluation
The Board will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. The Nominating and Governance Committee will receive comments from all directors and report annually to the Board with an assessment of the Board’s performance. This will be discussed with the full Board following the end of each fiscal year. The assessment will focus on the Board’s contribution to the Company and specifically focus on areas in which the Board or management believes that the Board can improve.
IX. Shareholders Access to Directors
1. Shareholder Communications.
Shareholders may communicate with the Board of Directors as a group and individual directors by sending written correspondence to the Chairman of the Nominations and Governance Committee at the following address: NewMarket Corporation, 330 South Fourth Street, Richmond, Virginia 23219, Attention: Chief Legal Officer.
2. Process for Collecting and Organizing Shareholder Communications.
The chief legal officer of the Corporation (the “CLO”) and his or her duly authorized agents shall be responsible for collecting and organizing shareholder communications. Absent a conflict of interest, the CLO is responsible for evaluating the materiality of each shareholder communication and determining whether further distribution is appropriate, and, if so, whether to (i) the full Board, (ii) one or more Board committees, (iii) the non-management directors, (iv) one or more Board members and/or (v) other individuals or entities.
These Corporate Governance Guidelines were duly approved and adopted by the Board of the Company on the 27th day of May, 2004, and amended on the 29th day of July, 2014.