The Board of Directors (the “Board”)
believes that the primary responsibility of the
directors is to provide effective governance over the
Company’s affairs for the benefit of its
shareholders. That responsibility includes:
• evaluating and compensating the
Chief Executive Officer and providing counsel and
in the selection, evaluation
and compensation of other members of senior
• reviewing succession plans for
members of senior management;
• reviewing and approving
significant financial and business transactions;
• adopting policies of corporate
conduct and ethics, including compliance with
and regulations and
maintenance of accounting, financial and other
controls, and reviewing
the adequacy of
compliance systems and controls;
• evaluating periodically the
overall effectiveness of the Board;
• reviewing the work and
effectiveness of the Board’s committees; and
• deciding on matters of corporate
The Board will have at all times an
Audit Committee, a Compensation Committee and a
Nominating and Corporate Governance Committee. All of
the members of these three committees will be
independent directors under the criteria established
by the New York Stock Exchange. The Board may have
such other committees as may from time to time be
deemed appropriate and the membership of such
additional committees shall be determined by the
The Board has adopted the following
guidelines to assist it in the exercise of its
responsibilities. These guidelines are not rigid
rules. These guidelines are reviewed periodically and
revised as appropriate to reflect the dynamic and
evolving processes related to the operation of the
Board. The Nominating and Corporate Governance
Committee assesses the appropriateness and efficacy of
GUIDELINES ON GOVERNANCE
Board Structure and Membership
1. Majority of the Members of
the Board Should Be Independent Directors.
The Board believes that a majority of the members of
the Board should be independent directors. Each
independent director must meet the independence
requirements of the New York Stock Exchange (“NYSE”)
and applicable state and federal law, including the
rules and regulations of the SEC, including the
1.1 No director who is
an employee, or whose immediate family member is an
executive officer of the Company is independent until
three years after the end of such employment
No director who receives, or whose immediate family
member receives, more than $100,000 per year in direct
compensation from the listed Company, other than
director and committee fees and pension or other forms
of deferred compensation for prior service (provided
such compensation is not contingent in any way on
continued service), is independent until three years
after he or she ceases to receive more than $100,000
per year in such compensation.
No director who is affiliated with or employed by, or
whose immediate family member is affiliated with or
employed in a professional capacity by, a present or
former internal or external auditor of the Company is
independent until three years after the end of the
affiliation or the employment of such auditing
No director who is employed, or whose immediate family
member is employed, as an executive officer of another
company where any of the Company’s present
executives serve on that company’s compensation
committee is independent until three years after the
end of such service or the employment relationship.
1.5 No director who is an
executive officer or an employee, or whose immediate
family member is an executive officer, of a company
that makes payments to, or receives payments from, the
Company for property or services in an amount which,
in any single fiscal year, exceeds the greater of $1
million, or 2% of such other company’s
consolidated gross revenues, is independent until
three years after falling below such threshold.
The definition of independence and
compliance with these guidelines will be reviewed
periodically by the Nominating and Corporate
The Board believes that directors who
are also employees of the Company should be limited
only to those officers whose positions make it
appropriate for them to sit on the Board.
2. Size of the Board.
The Board believes that, optimally, the Board should
number between five and ten members.
3. Service of Former Employees
on the Board. When an employee director
resigns or retires from his or her employment, he or
she should submit his or her resignation from the
Board at the same time. Whether the person will be
invited to remain or rejoin the Board will be a
decision considered by the Nominating and Corporate
Governance Committee and approved by the Board.
4. Director Qualification
Standards. The Nominating and Corporate
Governance Committee is responsible for assessing the
appropriate mix of skills and characteristics required
of Board members in the context of the perceived needs
of the Board or any of its committees at a given point
in time and will periodically review and update the
criteria as deemed necessary. The Nominating and
Corporate Governance Committee will evaluate the
qualifications of each director candidate against
criteria outlined herein and the criteria in its own
charter, as well as any additional criteria it sees
fit to consider in making its recommendation to the
Board concerning a candidate’s nomination for
election or reelection as a director. Candidates
nominated for election or reelection to the Board
should possess a high degree of personal and
professional ethics, integrity and values, an
independent mind and mature judgment. Candidates
should be involved only in activities or interests
that would not create a conflict with potential
directorial responsibilities to the Company and its
5. Selection of Directors.
The Board is ultimately responsible for nominating
members to the Board and for filling vacancies on the
Board that may occur between annual meetings of
shareholders. The Nominating and Corporate Governance
Committee is responsible for identifying and screening
candidates for Board membership.
Director Relations with
1. Board Access to Senior
Management and Independent Advisors.
Directors will have open access to the Company’s
management, subject to reasonable time constraints.
Any director or committee that wishes to meet with an
employee, including any officer of the Company must
arrange such meeting through the Chief Executive
Officer, General Counsel or other officer in charge of
legal affairs of the Company. In addition, members of
the Company’s senior management will, at the
request of the Board or the appropriate committee,
attend Board and committee meetings. Directors shall
have the resources and authority appropriate to
discharge their duties and responsibilities, including
the authority to retain special counsel or other
experts or consultants as they deem appropriate
without seeking approval of Company management.
2. Role of Chief Executive
Officer. The Chief Executive Officer is
responsible to the Board for the overall management
and functioning of the Company. The Board will assist
the Chief Executive Officer in complying with his or
her obligations under the rules of the Securities and
Exchange Commission and the rules of the NYSE.
3. Formal Evaluation of the
Chief Executive Officer. Annually, the
Compensation Committee should evaluate the
compensation package of the Chief Executive Officer
and will consider the performance of the Chief
Executive Officer in the course of its deliberations.
4. Reliance on Senior
Management. In discharging its obligations,
the Board will be entitled to rely on the honesty and
integrity of the Company’s senior management and
its outside advisors and auditors.
Operation of the Board –
1. Executive Sessions of
Independent Directors. The independent
directors may meet in executive session outside the
presence of the Chief Executive Officer and other
Company personnel prior to or after each regularly
scheduled Board meeting. The Chairman of each
executive session will be designated by vote of the
independent directors, will function as the presiding
director each time such group meets in executive
session outside the presence of the Chief Executive
Officer and other Company personnel and will serve as
the interface between the independent directors and
the Chief Executive Officer in communicating the
matters discussed during the executive sessions.
2. Regular Attendance of
Non-Directors at Board Meetings. The
Corporate Secretary, Chief Financial Officer and the
General Counsel will be present or otherwise available
during Board meetings. In addition, with the
concurrence of the Board, the Chairman of the Board
may invite one or more members of management to be in
regular attendance at Board meetings and may include
other officers and employees from time to time as
appropriate under the circumstances.
3. Frequency and Length of Board
Meetings. The Board shall meet at least four
(4) times a year. Special meetings are called as
necessary. It is the responsibility of the directors
to attend all of the meetings either in person or by
telephone. If a director is unable to attend a
scheduled meeting of the Board, he or she is expected
to notify the Chairman of the Board prior to the
meeting date. Directors are expected to attend at
least seventy-five percent of the regularly scheduled
Board meetings. The Chairman of the Board establishes
the agenda for each Board meeting.
4. Information Flow; Pre-Meeting
Materials. In advance of each Board or
Committee meeting, a proposed agenda will be
distributed to each member. In addition, to the extent
feasible or appropriate, information and data
important to the members’ understanding of the
matters to be considered will be distributed in
advance of the meeting. Directors should review the
materials in advance prior to each meeting and should
come prepared to discuss the items on the agenda.
Committees of the Board
1. Types of Committees.
The Board has established the following Committees:
Audit, Compensation, Nominating and Corporate
Governance, Executive, Development, Building, and such
other Committees as the Board may approve from time to
time. Annually, each Committee will review and
evaluate its own performance.
The Nominating and Corporate Governance
Committee is charged with reviewing the qualifications
of the members of each Committee to ensure that each
member meets the criteria set forth in applicable SEC
and NYSE rules and regulations, as well as each
2. Frequency and Length of
Committee Meetings. Each Committee will meet
as frequently and for such length of time as may be
required to carry out its assigned duties and
responsibilities. In addition, the Chairman of a
Committee may call a special meeting at any time.
3. Independent Advisors.
Each Committee will have the power to hire independent
legal, financial or other advisors as they deem
necessary to assist them in fulfilling the Committee’s
Other Board Practices
1. Director Orientation and
Continuing Education. An orientation program
has been developed for new directors which includes
comprehensive information about the Company’s
business and operations, general information about the
Board and its Committees, a review of director duties
and responsibilities, and a review of the Company’s
policies and its Code of Business Conduct and Ethics.
The Nominating and Corporate Governance Committee will
review and update the program as necessary.
In addition, the Board believes
continuing education is important for its directors.
Each director shall pursue and maintain the highest
levels of competency in their given field or specialty
through ongoing development and training.
2. Board Interaction with
Institutional Investors and Other Interested Parties.
The Board believes that it is senior management’s
responsibility to speak for the Company.
3. Periodic Review of These
Guidelines. The operation of the Board is a
dynamic and evolving process. Accordingly, these
guidelines will be reviewed periodically by the
Nominating and Corporate Governance Committee and any
recommended revisions will be submitted to the full
Board for consideration.
4. Director Compensation Review.
It is appropriate for senior management of the Company
to report periodically to the Board on the status of
the Company’s director compensation practices in
relation to other companies of comparable size and the
Company’s competitors. The form and amount of
director compensation shall be determined by the
Board. The Board should consider and be aware that
questions as to a director's independence may be
raised when directors fees and emoluments exceed what
is customary, and that similar concerns may be raised
when the Company makes charitable contributions to
organizations in which a director is affiliated or
enters into a consulting contract with a director or
provides other indirect compensation to a director.
5. Evaluation of Board
Performance. The Nominating and Corporate
Governance Committee is responsible for overseeing an
annual assessment of the Board’s performance.
Its purpose is to increase the effectiveness of the
Board, not to target individual Board members.
6. Conflicts of Interest.
If an actual or potential conflict of interest
develops because of a change in the business
operations of the Company or a subsidiary, or in a
director’s circumstances (for example,
significant and ongoing competition between the
Company and a business with which the director is
affiliated), the director should report the matter
immediately to the Chairman of the Board for
evaluation. A significant conflict must be resolved or
the director must resign from the Board.
If a director has a personal interest in
a matter before the Board, the director must disclose
the interest to the full Board and excuse himself or
herself from participation in the discussion and
cannot vote on the matter. Directors also are required
to follow the Code of Business Conduct and Ethics
7. Succession Planning.
The Board shall approve and maintain a succession plan
for the Chief Executive Officer, based upon
recommendations from the Executive Committee as well
as policies regarding succession in the event of an
emergency or retirement of the Chief Executive
8. Insurance and
Indemnification. The Board will be entitled
to have the Company purchase reasonable directors’
and officers’ liability insurance on its behalf.
Directors will be entitled to the benefits of
indemnification to the fullest extent permitted by
law, the Company’s Charter and By-laws and to
the extent provided in any indemnification agreements.
Directors will be entitled to the benefits of
exculpation provided by state law, as well as provided
in the Company’s Certificate of Incorporation
9. Code of Business Conduct and
Ethics. The Board will adopt a Code of
Business Conduct and Ethics for the directors,
officers and employees of the Company. The Nominating
and Corporate Governance Committee will periodically
review the Code of Business Conduct and Ethics and
make recommendations with respect to any changes,
amendments and modifications that it deems desirable.