guidelines shall apply to the corporate governance of Wellman, Inc.
Independence: The Board shall have a
majority of directors who meet the independence criteria discussed below
under "Director Independence."
A director should possess personal and professional integrity, have good
business judgment, relevant experience and skills and be an effective
director in conjunction with the full Board in collectively serving the
long-term interests of the Company stockholders. Directors should be
committed to devoting sufficient time and energy to diligently performing
their duties as directors.
of Board: The Board shall determine the appropriate size of the Board
within the requirements of the Company's Charter and Bylaws.
Process: In accordance with the policies and principles in its charter, the
Nominating and Corporate Governance Committee (the "Governance
Committee") is responsible for identifying and recommending potential
director nominees to the Board for its approval when there is a vacancy on
the Board. The Chairman of the Governance Committee and the Chairman of the
Board shall extend an invitation to the potential director nominee to join
Review of Independence and Qualifications: The Governance Committee shall
distribute annually a self-evaluation to the Board that includes an
assessment of the directors' independence and qualifications.
from the Board: An individual director should offer his or her resignation
in the event the director's principal occupation or business association
changes substantially from the position he or she held when originally
invited to join the Board. The Board should consider the continued
appropriateness of the director's membership on the Board under the changed
circumstances and then the Board should determine whether or not to accept
the director's resignation. Also a director should tender a resignation in
the event there is a substantial conflict of interest between the director
and the Company or the Board and such conflict cannot be resolved to the
satisfaction of the Board.
from the Board: A director shall retire from the Board no later than the
first meeting of shareholders to elect directors after he or she reaches 75
years of age; provided, however, that if any director is 75 years of age or
older on the date of the 2004 annual meeting of shareholders, he or she
shall retire from the Board no later than the first meeting of shareholders
to elect directors after he or she reaches 80.
when Conflict of Interest: Prior to any Board discussion or decision
related to any matter that potentially affects a director's personal,
business or professional interests, that director should (i) disclose the
existence of the potential conflict of interest to the Chairman of the
Board and (ii) if the Chairman of the Board (in consultation with legal
counsel) determines a conflict exists or the perception of a conflict is
likely to be significant, recuse himself or herself from any discussion or
vote related to the matter.
on Number of Board Memberships: No director may serve on more than five
other public company boards. A director should advise the Chairman of the
Board and the Chairman of the Governance Committee in advance of accepting
an invitation to serve on another public company board.
Limits: The Board does not believe it should establish term limits. The
Company and its stockholders both benefit from Board continuity and
stability and by allowing directors to focus on long-term business
strategies and results.
Committee Financial Expert. At least one member of the Audit Committee
shall satisfy the definition of "audit committee financial
expert". An audit committee financial expert means a person who has
the following attributes:
understanding of generally accepted accounting principles and financial statements;
ability to assess the general application of such principles in
connection with the accounting for estimates, accruals and reserves;
preparing, auditing, analyzing or evaluating financial statements that
present a breadth and level of complexity of accounting issues that are
generally comparable to the breadth and complexity of issues that can
reasonably be expected to be raised by the registrant's financial
statements, or experience actively supervising one or more persons
engaged in such activities;
understanding of internal control over financial reporting; and
understanding of audit committee functions.
A person shall have
acquired such attributes through:
and experience as a principal financial officer, principal accounting
officer, controller, public accountant or auditor or experience in one or
more positions that involve the performance of similar functions;
actively supervising a principal financial officer, principal accounting
officer, controller, public accountant, auditor or person performing
overseeing or assessing the performance of companies or public
accountants with respect to the preparation, auditing or evaluation of
financial statements; or
majority of the Board and all the members of the Audit, the Compensation
and Benefits, and the Governance Committees shall be independent from
management. The Board must make an affirmative determination whether or not
a director is independent from management and disclose this determination
in the annual proxy statement.
term "independent" is defined in accordance with the New York
Stock Exchange ("NYSE") independence requirements. For purposes
other than membership on the Audit Committee, a director is deemed to be
independent if he or she does not have a direct or indirect material
relationship with the Company. In determining the materiality of a
relationship and the director's independence, the Board shall be guided by
the following independence standards:
director qualifies as "independent" unless the board of
directors affirmatively determines that the director has no material
relationship with the Company (either directly
or as a partner, shareholder or officer of an organization that has a
relationship with the Company). The Company shall disclose these
following persons shall not be considered independent for the periods
A director who is an employee or whose immediate family member is
an executive officer of the Company is not independent until three years
after the end of such employment relationship.
A director who receives, or whose immediate family member
receives, more than $100,000 per year in direct compensation from the
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 not
independent until three years after he or she ceases to receive more than
$100,000 per year in such compensation.
A 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 not independent until three years after the end of the
affiliation or the employment or auditing relationship.
A 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 the other company's compensation
committee is not independent until three years after the end of such
service or the employment relationship.
A director who is an executive officer or an employee, or whose
immediate family member is an executive officer, of another 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 not independent until three years after falling below such
of the Audit Committee must also satisfy the requirements of Rule 10A-3(b)(1) under the Securities Exchange Act of 1934 in
order to be considered independent. The foregoing independence
requirements shall be interpreted in accordance with the rules and other
pronouncements of the New York Stock Exchange.
are expected to prepare for and attend scheduled meetings of the full
Board, the non-management executive sessions of directors and board
committee meetings, as appropriate. The Board expects to have not less than
four regularly scheduled meetings each year. Upon adequate notice,
unscheduled meetings may be called throughout the year as the need arises.
The Chairman of the Board shall consult with other Board members in
determining the times and duration of the Board meetings.
Attendance: Directors are expected to attend meetings of the Board and of
the committees on which they serve. Directors also are expected to devote
an adequate amount of time and effort to discharge properly their
Materials: Information and data that are important to the Board's
understanding of the business to be conducted at a Board or committee
meeting should be distributed to the directors sufficiently in advance of
the meeting to permit their review. Directors are expected review these materials
in advance of the meeting. A director may request that the CEO or
appropriate member of senior management present to the Board specific
information as it relates to the Company and its operations.
Meeting Agenda: The Chairman of the Board shall establish the agenda for
each Board meeting. Each director shall be furnished with a copy of the
agenda in advance of the Board meeting if possible, and if advance
distribution is not possible, then the agenda shall be distributed at the
Board meeting. Each director may suggest the inclusion of agenda items.
Each director can bring up, at any Board meeting, subjects that are not on
the agenda for that meeting.
Executive Session of Directors: The non-management directors shall meet in
executive session as they deem appropriate. The Chairman of the Governance
Committee will be the "Presiding Director" at these
non-management executive sessions. The name of the Presiding Director shall
be disclosed in the annual proxy statement, together with a system for
interested parties to communicate directly with the "Presiding
Board shall have at all times an Audit Committee, a Compensation Committee
and a Governance Committee. Each Committee shall have at least three members,
each of whom shall be independent directors as determined by the Board in
accordance with the aforementioned independence criteria. Committee members
shall be appointed by the Board upon recommendation of the Governance
Committee after considering the Chairman's recommendation. In making any
committee appointments, consideration should be given to the periodic
rotation of a committee member; however, such rotation is within the
Audit Committee, the Compensation Committee and the Governance Committee
each shall have a written charter that sets forth the committee's
structure, membership qualifications, purposes, responsibilities, and
procedures for appointing and removing committee members. The charters also
shall provide that each committee annually evaluates its performance.
committee chairman, in consultation with the committee members, shall
determine the frequency and length of the committee meetings consistent
with any requirements set forth in the committee's charter. Each committee
chairman, in consultation with the appropriate members of the committee and
management, shall develop the committee's agenda. Each committee shall
report to the Board its activities, findings and recommendations after each
Board may, from time to time, establish or maintain additional committees
of the Board, including an Executive Committee. If an Executive Committee
is established, it will have the powers and authority as specified by the
Board resolutions creating it.
committee shall have the full power and authority to hire independent
legal, financial or other advisors as it may deem necessary, without
consulting with or obtaining the pre-approval of any Company officer or the
director may attend any committee meetings, whether or not he or she is a
member of that committee, providing that he or she has obtained
pre-approval to attend from the committee chair or a majority of the
CHAIRMAN OF THE
Board will appoint the Chairman of the Board who can be an employee of the
Company. The Chairman will chair all regular sessions of the Board and
(with input from the CEO to the extent not inappropriate) set the agenda
for Board meetings, subject to the right of each Board member to suggest
the inclusion of item(s) on any agenda.
DIRECTOR ACCESS TO
OFFICERS, EMPLOYEES AND INDEPENDENT ADVISERS
are encouraged to keep themselves informed with regard to the Company and
its operations. Directors shall have full and free access to Company
officers and employees. Any meetings or contacts that a director wishes to
initiate may be arranged through the CEO, the Corporate Secretary or
directly by the director. Directors shall use their judgment to ensure that
any such contact is not disruptive to the Company's business operations and
shall, to the extent that it is not inappropriate, copy the CEO on any
written communications between a director and a Company officer or
Board shall approve any director's request to have senior Company officers
and other personnel regularly attend the Board meetings. Directors will
also have access to the Company's independent advisors following
consultation with the CEO to the extent not inappropriate.
directors shall receive directors' fees as their only compensation for
Board and/or Board committee service. Directors' fees shall be in the form
of cash, company stock, including options and restricted stock, or
combination thereof, as well as any additional benefits regularly given to
all directors. The exact amount and form of director compensation shall be
determined and reviewed annually by the Compensation Committee in
accordance with the policies and principles set forth in its charter.
AND CONTINUING EDUCATION
new directors shall receive an orientation package. The package will
include a copy of the Company's by-laws and charter, the Code of Business
Conduct and Ethics, the Corporate Governance Guidelines, all SEC filings
for the current year and last preceding calendar year, press releases
issued during the current calendar year and any other pertinent
information. The new director will attend a meeting with the CEO and CFO to
be briefed on the Company's strategic plans and its significant financial,
accounting and risk management issues.
directors must receive annual director education in subjects relevant to
the duties of a director, including the study of corporate governance best
practices or ethics. The Company will provide appropriate program(s) to
CEO EVALUATION AND
Compensation Committee shall conduct an annual review of the CEO's
performance and compensation, as set forth in its charter. The executive
session of the Board shall review the Compensation Committee's report in
order to ensure that the CEO is providing the best long and short-term
leadership for the Company.
Governance Committee shall make an annual report to the Board on emergency
as well as expected CEO succession planning. The entire Board shall work
with the Governance Committee to nominate and evaluate potential successors
to the CEO. The CEO shall provide the Committee with his or her
recommendations and evaluations of potential successors, along with a
review of any development plans recommended for such individuals.
Governance Committee shall have responsibility for conducting and
overseeing the annual self-evaluations for the Board and reporting the
results to the Board following the end of each fiscal year. The evaluations
will be based on such objective and subjective criteria as the Board deems
CODE OF BUSINESS
CONDUCT AND ETHICS
Board shall adopt and maintain the Code of Business Conduct and Ethics (the
"Code") for the directors, officers and employees of the Company
in compliance with the proposed NYSE requirements. The Code shall be posted
on the Company's website. The purpose of the Code shall be to focus the
directors, officers and employees on areas of ethical risk, provide
guidance in recognizing and dealing with ethical issues, provide mechanisms
to report unethical conduct, and help foster a culture of honesty and
director shall act at all times in accordance with the requirements of the
Code. Waivers of the Code for any officer or director may only be made by
the Board of the Company or by a Board committee composed of independent
directors. Any waiver for an officer or director must be posted on the
Company website and otherwise disclosed as required by law.
reports of concerns regarding accounting, internal auditing controls, or
other irregularities or concerns whether financial or otherwise shall be
brought to the attention of the Chairman of the Audit Committee. These
reports are confidential and may be anonymous if made using the Anonymous
Reporting Hotline maintained by the Audit Committee. The Board shall be
notified of these reports at every quarterly Board meeting or sooner, if necessary.